Facebook is a good place to find people from your long-ago past, commemorate significant personal events, and share the passage of time. However, for up-to-the-moment news I turn to Twitter.
Social-Media platforms have no inherent purpose—other than as a method of communication—and only gain significance from how and why the users want a particular platform to function. Messenger and Viber are platforms for specialized communication to a much narrower group than Facebook friends and Twitter followers. Instagram and Snapchat were enhanced instant messaging services that became picture and video sharing services.
The evolution of all of these into a global sharing service is astounding considering the human legacy of “mass” communication was once drawing pictures on a cave wall.
The sharing of ideas differs from platform to platform. On Facebook it is not uncommon to have someone write five hundred words not unlike this column. That is then responded to by a “Like” emoji or a rude “Ha-ha” emoji. The most normal attempt at any sort of “conversation” is a reply of 200 words and back and forth to deadly boredom.
Twitter facilitates an actual conversation between two or among many, which follows my rules for good communication. Keep it concise, precise, and brief. If you cannot convey at least the beginnings of an idea in 140 characters, start over and try again.
I learn much and get many ideas from the people I talk to on Twit.
A few days ago, two comments came my way. One follower said, “Russia has reminded everyone that grain and oil are more valuable than fake money.” The other thought was, “The fact that global oil is at eight-month low at a time when Putin is significantly escalating the war seems counter-intuitive. But I guess this just means the Fed’s aggressive hike and China Zero-Covid policy have greater effect.”
These two people in a combined total of 56 words said much more than most pundits—and experts—can in several thousand. Concise, precise, brief, and thought provoking.
As much as some people who are apparently nostalgic for the horse and buggy days would like, we will never go back to being like pirates carrying a leather pouch filled with silver “Pieces of eight” or Spanish gold Doubloons. Currency has been backed by government debt worldwide for decades. Some would, and maybe rightly so, call this “fake money” because it has no inherent —utility—value. Thousand paper bills cannot be eaten, will not keep the rain off your head, or cover your private parts nor can you automatically exchange them for some that has utility.
It only has “value” if and when you can find someone else that thinks paper notes have inherent value to them.
But war always gets people back to making the choice between “diamonds or oranges” as the apocryphal story goes from the sinking of the Titanic. Zoltan Pozsar, Global Head of Short-Term Interest Rate Strategy at Credit Suisse, wrote: “This crisis is not like anything we have seen since President Nixon took the US dollar off gold in 1971—the end of the era of metal-based money when the dollar took over the role as the global reserve asset from gold.”
Gold-backed currency was a barter system like “gold for wheat.” “Fake money” was “The guy with the most secure debt (the USA) has the best money.” Going forward we will be back to barter with “the commodity-currency revolution.” “Thanks for buying our shoes and shirts but I really don’t want the paper with the pictures of your dead national heroes. But have you got any copper or mangos to trade?”
“The fact that global oil is at eight-month low…” is part of the “more valuable than fake money” proposition because for decades oil was, for all intent, a currency bought and sold for profit and as a store of wealth and trading even if no one wanted it for a utility purpose.
The reason why oil going down is not counter-intuitive to the Ukraine war is because the war drama that pushed the price higher among speculators has been overtaken by “What are we going to use it for as economies potentially crash?”
E-mail me at mangun@gmail.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis provided by AAA Southeast Equities Inc.