§5.59 — As financial modernity advances, ‘printing’ becomes an increasingly unreliable metaphor for money creation, even as paper continues to support its metaphors. The engine of currency production is no longer any kind of minting or printing, but (fractional-reserve) credit. At the limit, the formula of the Macro epoch is an equation of money and debt. Its foundations are as old as Modernity, but no older. Mere centuries sufficed for it to fabricate the illusion of something more archaic, or even eternal.
§5.591 — Political economy is an apparent identity, but a real synthesis. It requires a coupling mechanism. Concretely, the crucial communication medium has been the bond market. Given a fixed coupon, the effective interest rate will vary as the reciprocal of the bond price. The yield on government paper thus articulates a ‘market verdict’ on the political regime. It expresses something far more valuable than ideological affection, namely pragmatic confidence. The question addressed is only: Will this work? While stated confidence in government is communicated through a variety of professional channels, media, and electoral processes, revealed confidence is expressed through secondary markets in public debt. The bond market has provided such automatic commentary since the beginning of the modern period (already operating in the city states of Renaissance Italy), and can even – again concretely – be identified as an essential or defining component of modern political-economic governance. Capitalism might – quite sensibly – be taken to mean precisely this, at least up to the point currently reached. Political regimes make themselves an object of economic investment, inviting private wealth-holders to ‘go long’ government. Because this mechanism enables – to some effective degree – private markets in public policy, it provides the Macro regime with its most important feedback control. We meet Janus again (as with every social regime). Political-economy is only Janus’ modern name. The ambivalence is the engine. A hinged singularity produces effects of pseudo-universality on its public face, and intelligible incentives on its private face. Continuous temptation to resolution, in one or other direction, adds camouflage as a supplement. There’s a simple story you want to tell, which is how it hides.
§5.592 — Money has fully absorbed the ambivalence of political-economy. This has made it cryptic, quite beside it becoming cryptographic. It invites misapprehension. Of course, it is no secret that, historically, the promissory value of paper money has been very specifically tied to the prospect of redemption in precious metal. It is in fact almost, though not quite, the precise opposite of a secret – an anti-secret. With the consolidation of Macro, this has matured into a type of tolerated hypocrisy, and something like an inside joke. A concession to tradition is made where it appears most harmless. Much more is happening here, though, than a joke. The persistence of this image of value advances metallic durability into an abstracted dimension. Whenever money is momentarily jolted from its constitutive – cash-like – amnesia, it grates upon metal memory. Sheer semiotic inertia would suffice to ensure this, in the absence of any additional considerations. The Mises Regression Theorem acknowledges the same track-marks. Despite the appearance of anachronism, at no stage has this concrete definition of monetary obligation been formally updated. It has merely been repudiated. The commitment is restated without being maintained. This preserves it as a dramatic violation. To describe it as ritualistic sovereign transgression is not an excessive stretch. The repudiation of metallic obligation has been politically spectacular. Overt contempt for a nominally enduring formal constraint was itself sold as a viable – and indeed overwhelmingly dominant – socio-political position. The mass psychology of the New Deal remains entirely unintelligible until this is understood. The abuse was the attraction. In this way, as in so many others, the New Deal was classically fascist. When unleashed executive power is the selling-point, there is no inclination to conceal the broken leash. It takes the trampling of old constraints to legitimate a Caesar, and it takes a Caesar to master popularity. Only hopeless naivety would recognize FDR as anything else.
§5.593 — Ever since the gold standard was ended, the principal support for monetary value has been the state guarantee of its acceptance for the extinction of tax obligations. By denominating their exactions in the national currency, and thus authoritatively defining their medium of internal revenue, governments are able to support a very substantial demand-floor for their own paper (whether currency notes or bonds). Within this arrangement, socialist and nationalist themes are merged, without significant remainder on either side. Government market-making of this kind – in which the state operates as a customer – fulfills an important mercantilist function. In most modern societies it has a wide domain of application, extending typically across business sectors more-or-less plausibly classed as ‘strategic’. Nowhere beyond the monetary sphere, however, is such a mercantilist program comparably cloaked by the purity of administrative fiat. The barrier posed to the adoption and spread of alternative currencies by the normalization of state-centric monetary nationalism vanishes beyond the horizon of public perception. It is only on the global periphery – among economies that are to some considerable extent ‘dollarized’ – that the nation state’s monetary power remains naturally conspicuous (and thus susceptible to refusal).
§5.594 — The spontaneous
cosmopolitanism of the precious metal coin exposes – through contrast – the
historical peculiarity of ‘globalization’ in the age of monetary nationalism. Metal
maintains an exteriority in relation to the minting regime. Its value indexes a
substance outside political dependency.
Government paper, in contra-distinction, requires additional institutional
support. The decentralized verification process of the assay is not available, or
relevant. What matters for verification now is only the authenticity of the
statement, whose negative is forgery, or counterfeiting. The currency unit is
irreducibly invested in its regime of issuance. Thus, forex operations become
an institutional subspecies of international relations. Acceptance of a
currency now implies substantive – rather than merely formal – political
recognition. There can only be foreign exchange once the right to make promises has been granted to all relevant
 By productive irony, the primary meaning of the bond market is a secondary market in government paper. Efficient feedback is the result of a substantial step removal from participation. There is no direct engagement with the government here at all. Rather, there is something like detached commentary, but with every intellectual commitment put to the test, through bets. Neither citizen involvement, nor journalistic opinion, then, but an index of political-economic judgment supported by real incentives, and characterized by unprecedented objectivity. It is retreat from the public sphere – in both its practical and epistemological aspects – that allows for its neutral evaluation.
 Paul Krugman unexceptionably remarks: “Money is a pretty amazing thing. Why does a piece of green paper with a dead president on it have value? Ultimately, it’s because other people believe it has value, and [it] circulates. However, there is an anchor for dollar bills which is not gold. It is the fact that you can use it to pay taxes.”
See: Thomas Piketty, Paul Krugman and Joseph Stiglitz: The Genius of Economics
 The world’s first international currency of modern times, the Spanish Real de a Ocho or ‘Piece of Eight’ (Peso de Ocho), was a silver coin that monetized the precious metal acquisitions of the New World. Its value was invulnerable to hypothetical collapse – or even comprehensive annihilation – of the Spanish empire. The regime risk borne by those holding it was zero. Reciprocally, it involves minimal regime complicity. The Spanish empire was not being in any serious way automatically endorsed by those holding or trading in its currency. Hence classical mercantilism sought to deny foreign access to the national currency, with ‘losses’ of treasure analogized to bleeding. Since geopolitical legitimacy cannot be propagated through metal, no regime incentives exist to promote its diffusion.