How the Concept of Sound Money Gave Me Purpose in Life
Mario Inneco has had a YouTube channel - maneco64 - since 2015 and regularly gets 20,000-75,000 views.
Mario's background is in financial markets and economics, having worked for over twenty years in the City of London, specialising in the exchange-traded derivatives market. Mario dealt for major financial institutions and corporate entities advising clients on the government bond market, interest rates, financial markets in general and the economy. He has also been an ardent student of the Austrian School of Economics. Through his videos and articles, he endeavours to inform the public about how the financial markets and current fiat monetary system functions.
"Growing up in Brazil in the 1970s and early 1980s, high - or even hyper - inflation was part of everyday life and yet nobody, especially the general public, seemed to understand it or had enough time and resources to study the subject. What we were told, mostly, was that it was the fault of the Arab countries and OPEC for putting an embargo on oil exports. So the narrative was that high oils prices were the cause of inflation.
Skip forward a few years and I had gotten an undergraduate degree in International Relations with an emphasis in Economics from an American university. One would think I would by now know what inflation and sound money were all about but on the contrary, I was even further away from understanding inflation and money. One would think that money - half of all commercial transactions necessitate it - is such an important subject that high schools, let alone institutions of higher learning, would do their best to explain it. Unfortunately, they do not.
So what happened after leaving university - even though my professors wanted me to go on and do a Masters degree? I had had enough of studying - so I thought - and wanted to go into the real world, start a career in finance and earn my keep. After a few odd jobs ski instructing at a German version of Club Med called the Robinson Club (by then my parents had moved to Switzerland), I landed a job at a small private bank in Geneva, Switzerland. I guess my experience with inflation in Brazil and my economics background pushed me into finance.
One might be thinking by now, after a few year in a private bank, surely you know what money and inflation really were. Well, I’ve got bad news for you because even though I learned all about the business from the bottom up, there was very little talked about in terms of what money was, even though we moved hundreds of millions of dollars or Deutschmarks around in the markets. What we focused on was making sure we made the right investments and that trades were properly translated so our clients would get a return and we would earn our fees or commissions.
Sound money was something I had never heard of until the early 2000s and by that time I had moved from Geneva to London and had been working in the government bond market for over ten years. By now I also had started a family and my purpose was to do as well as possible and provide a good life for them. So sound money was something I never thought about and by then the people who controlled our currency, the Central Bankers and the politicians, had done a decent enough job of keeping the inflation genie in the bottle.
But in 2000 and leading into 2001 the stock markets experienced the biggest crash, the Dot Com Crash, since 1987 and by then my wife and I had been contributing to a private pension and to our dismay the value of this had been severely cut as a result of the crash. It was not only tech stocks that suffered but the whole market. By 2002 I had been looking into the Austrian School of Economics as the growth of the internet made it easy for people like me who keep asking questions and want answers for things like taxation and why the better we do in our careers, the more we are punished - not just by the income tax but by VAT on almost everything. I wanted to know why a bunch of bureaucrats in Whitehall knew what was best for me and my family, so that I had to give them a big chunk of my hard-earned earnings.
It was through the Austrian School and via the Moses Institute (miles.org) that I came upon the concept of sound money and why we had not had some semblance of sound money since August 15, 1971 when President Richard Nixon detached the American dollar from gold by closing the so-called gold window. For the first time in my life I learned the basics of money from Murray Rothbard’s “What has Government Done to Our Money”. In this easy to read book Rothbard applies Ludwig von Mises Regression Theorem. It sounds complicated but all it means is that to know what money is you need to go back in history to find out how it evolved. To put it in a nutshell, humans started as hunter gatherers and as we evolved into tribes, villages, towns, cities, counties and eventually nations the way we transacted with each other also evolved. We went from bartering value for value to eventually discovering that some commodities or even goods were always wanted by most. This commodity then became the most marketable commodity - or as the Austrians put it money. I would speculate that not 1 in 100 is taught this at Oxford, Yale, Princeton or even the LSE. I will come to why in a minute.
So what I learned from the Austrians and even from former Fed Chairman Alan Greenspan (yes he was and - according to him still is - a sound money proponent or gold bug), is that gold and its cousin silver have been money or the most marketable commodity for a couple of millennia. The reason we have not gone back to sound money is because statists, think Whitehall, and bankers hate the discipline that it imposes on the monetary system. Prior to 1971 under the Bretton Woods standard, the dollar was pegged to gold at $35 per troy ounce and the pound was pegged to the dollar at a fixed rate too, so if a banker wanted to issue a loan he had to make sure he had enough gold and politicians could not just ask the Central Banks to print reserves out of thin air to buy the government debt so they could increase spending and the size of government.
Let us now skip to 2008 and by now I was aware of the fraudulent nature of our fiat currency system in which the government says the paper currency is “money” because they say so and not because it is the most marketable commodity that takes time, money and effort to dig out of the ground. By now my wife and I had decided to diversify and started buying gold and silver as we knew things would come to no good. When Lehman Brothers collapsed in 2008 and the rest of the big banks were within days of collapsing I was still sitting at my dealing desk at MF Global in Sugar Quay and I was actually unconcerned, because I was prepared for all of it. Things though never work out as exactly as we think they should and not surprisingly our governments decide to bailout the bankers and also those who had gone along with the game of borrowing without any worries.
By now I knew that my days in the City of London were numbered because my heart was not in it. I could see that the system had indebted the unsuspecting public, our children and grand children to make sure the bankers in the Square Mile and Lower Manhattan, hedge fund managers and those who took mortgages they could not really afford did not pay for their mistakes. If anything they were allowed to keep their bonuses!
So let’s skip to late 2015 and by now I had left my desk in the Square Mile, had tried a business that didn’t really work out (I didn’t get bailed out). It was then, after watching regular people on YouTube talking about their experiences and having thousands of people follow and listen to them, that I decided to start posting content on my Maneco64 channel. My purpose was to wake the general public about what I learned about the monetary and financial system and why it was at the time and is still today doomed to implode and financially hurt many. I also wanted to inform people about markets because I still love markets and the excitement of trading, investing and speculating. What I don’t like is rewarding failure, which is what we do for the too-big-to-fail banks, hedge funds, energy companies and others.
Being a novice to creating content online via YouTube videos, it took some months to start marketing myself and I came up with my motto that is “the home of alternative economics and contrarian views”. It was my purpose that kept me from worrying about hitting subscribers and views targets as I knew that if I stuck to my goals of waking up the public to sound money and a more honest monetary world, the numbers would wrack up. It has been a long journey but through my channel I have met many wonderful people from all over the world and from all walks of life that I would never had met if I had stayed stuck to my City desk. A lot of my viewers say that what we now have with Maneco64 is a community. So I have to count myself blessed that I not only found a purpose but have also been able to build up a community that will hopefully keep growing.
