What if the war in Ukraine has nothing to do with NATO, democracy vs. dictatorship, freedoms vs. tyranny? What if it is all about the Fed and ECB creating trillions in pixel currencies out of thin air, inducing the world’s largest producer(s) of non-renewable resources, who have to sell them priced in exactly those currencies, to decide “the hell with this, I’m raising prices in any way possible, including war”?
First, some charts:
- The price of the US dollar in barrels of oil (1/WTI oil price), longer term and more recently for better scaling. Back in 1945 the dollar was worth almost 1 barrel of crude oil, today its value has evaporated to less than 0.01 barrel. That’s a 100-fold dollar devaluation against a real product/asset.
- Next, the amount of dollars created in the same time (M3). Notice how the slope of the curve, ie the rate at which dollars are being pixelated, keeps getting steeper over ime, culminating in a near vertical rise during the pandemic.
- Ditto for the euro, albeit at a somewhat less rapid rate. The inflation-weary Bundesbank is still influential within the ECB, after all.