The Global “Balance Sheet” in Spreadsheet Capitalism

Posted on | February 2, 2026 | No Comments

Pennings, A.J. (2026, Feb 02) The Global “Balance Sheet” in Spreadsheet Capitalism. apennings.com https://apennings.com/political-economy-of-media/the-global-balance-sheet-in-spreadsheet-capitalism/

Dr. Michael J. Howell, author of Capital Wars (2020) and a popular guest on many financial channels, is a financial analyst that I follow. Having worked in finance for over 30 years, and a former Research Director at Salomon Bros where he developed his theories of ‘Global Liquidity.’ He connects this with the ‘balance sheet’ that has been another important metaphor for understanding power, stability, and possibility in the modern global economy.[1]

The “balance sheet” is one of the most powerful instruments and also a metaphor in the modern global economy. At its most basic level, a balance sheet is an accounting snapshot in time that merchants have used for centuries.[2] It answers three questions: What is owned (cash, inventory, factories)? What is owed (Loans, bonds, payables)? And what remains once obligations are netted out? The net value (Wealth). On its surface, it is a simple accounting statement with assets on one side, and liabilities on the other, with equity as the residual.

In the parlance, the global balance sheet has become a way of seeing the world, a framework through which analysts, policymakers, and investors interpret stability, risk, and power in a system saturated with debt. It is a conceptual, schematic spreadsheet of the global balance sheet. It is not a literal accounting statement but a computational map of how spreadsheet capitalism organizes the planet’s assets, liabilities, and residual equity through the SACT layers.[3]

Think of this as the minimum viable ledger that financial terminals, central banks, and AI models implicitly negotiate and reconstruct every day. If the Fed anchors liquidity, financial terminals compute its reality. Bloomberg, LSEG, Wind, and Aladdin terminals do not hold the global balance sheet, but they are where its parts are assembled, visualized, stress-tested, and traded.

Spreadsheet capitalism builds a global balance sheet by transforming the messy world into synchronized, computable claims. Through substitution, abstraction, symbolic computing, and telecommunications grids (SACT), it creates a system in which liquidity governs outcomes and balance sheets define possibility.

In a debt-filled world, the central question is no longer who produces what, but how to expand balance sheets when stress arrives. The answer to that question increasingly determines economic stability, political authority, and global hierarchy. The balance sheet, once a bookkeeping device, has become the architecture, infrastructure, and index of the modern world’s political economy.

Michael Howell and the Liquidity Model

Howell’s CrossBorder Capital operationalizes the view of the balance sheet by arguing that in a debt-saturated world, the quantity of money (liquidity) matters more than the price of money (interest rates). Countries and corporations around the world have accumulated massive amounts of debt ($300+ trillion). This debt can rarely be paid off; it must be rolled over (refinanced).

Howell views the Global Balance Sheet as the mechanism that “warehouses” this debt, primarily as collateral. Central Banks and private financial institutions must constantly expand their balance sheets (buy debt/provide cash) to keep the system moving. But unlike a firm’s balance sheet, there is no sovereign accountant of the world. No institution has jurisdiction over all assets, liabilities, and collateral chains simultaneously. Instead, the global balance sheet emerges from the aggregation of many partial balance sheets, stitched together through spreadsheet logic, standards, and telecommunications.

This AI-prompted image of the Global Balance Sheet is suggestive of abstracted items, categorical indexes in their own right, of the areas of assets and liabilities that represent the world’s wealth.

A liquidity crisis occurs not necessarily when interest rates rise, but when balance sheet capacity shrinks or becomes unbalanced. If banks are scared or regulated into shrinking their balance sheets, no one buys the debt. When the refinancing mechanism jams, the global economy faces a cardiac arrest. For Howell, the Global Balance Sheet can be visualized as a hydraulic system. If the “flow” of liquidity stops, the “stock” of debt explodes, and the repercussions mount.

Howell’s liquidity model reframes macroeconomics around balance sheet expansion rather than traditional flow variables like GDP or productivity. In this framework, liquidity is the capacity of balance sheets to grow without triggering forced deleveraging. The major liquidity solution is the USD.

The US dollar markets are the circulatory system of that liquidity. Global liquidity expands when:

– US financial conditions are easy (Low interest rates)
– USD funding markets function smoothly (Sufficient US debt)
– Central bank balance sheets grow (Quantitative easing)
– Risk assets can be financed and refinanced (Collateral availability)

Conversely, liquidity contracts when dollar funding tightens, regardless of local conditions elsewhere. Howell emphasizes that global asset prices move less in response to local fundamentals than to changes in dollar liquidity. Trade deficits, direct foreign investment, foreign aid, and, in some ways, the US military bases have fed the world’s demand for USD. This is because the dollar is the predominant medium through which leverage is created and sustained globally.

Spreadsheet Capitalism: Constructing the World via SACT

“Spreadsheet Capitalism” is the theory that the economy is less driven by factories (the material) and more by the manipulation of symbols in grid-based, screen-based logic (the virtual). However, you cannot just put a company or a factory on a spreadsheet without it going through a translation process. This is where the SACT layers come in. This framework explains how the “messy world of things” is purified into a clean, alphanumeric/Unicode grid that registers on the Global Balance Sheet.

Spreadsheet formulas are the operating logic of the balance sheet. They do not just calculate totals; they structure how reality is represented, compared, and governed. In spreadsheet capitalism, formulas turn the balance sheet from a static report into a dynamic decision system that updates, reacts, and disciplines behavior in real time. In a debt-filled world, the balance sheet does not merely record economic reality. It organizes and enables it.

As mentioned before, a balance sheet asks: What is owned? What is owed? And what remains once obligations are netted out? For a household, this might be a home, a mortgage, and net worth. For a corporation, factories and intellectual property are offset by bonds, loans, and payables. For a government, the balance sheet includes infrastructure, taxing authority, and monetary sovereignty set against public debt.

What gives the balance sheet its enduring power is not its detail but its structure. By forcing everything into comparable categories, it creates the illusion of commensurability across radically different things: roads and derivatives, labor and leverage, forests and financial claims. This is why the balance sheet travels so easily from accounting into political and macroeconomic discourse. It offers a way to compress complexity into a form that appears objective, rational, and manageable, and yet scales into global significance.

Liquidity and the Balance Sheet Worldview

Financial analysts like Michael Howell have elevated the balance sheet from an accounting tool to a macroeconomic lens. In Howell’s work on global liquidity, the key insight is that in a world saturated with debt, outcomes are determined less by growth or productivity alone than by balance sheet capacity and the availability of liquidity.

From this perspective, economic crises like 2008 are not primarily failures of fundamentals. They are balance sheet events. When liquidity expands, asset prices rise, leverage is sustained, and risk appears manageable. When liquidity contracts, balance sheets tighten simultaneously, forcing deleveraging, asset sales, and cascading instability.

The focus shifts from income statements to stocks rather than flows, from earnings to funding conditions. Central banks, especially the Federal Reserve, become balance sheet managers for the entire system. Their asset purchases, swap lines, and collateral policies determine whether the global balance sheet can expand or must shrink.

Liquidity, in this view, is not money in the everyday sense. It is the ease with which balance sheets can grow without breaking. This makes equity epistemically fragile. A price change can erase it; A risk model can shrink it; A downgrade can destroy it. Equity is not directly observed. It is calculated. In global finance, this means equity exists because spreadsheet models say it does.

From the Messy World to the Global Balance Sheet

Spreadsheet capitalism is the infrastructure that makes this balance-sheet worldview possible at the planetary scale. The real world is disordered. Its goods decay, labor is heterogeneous, energy fluctuates, ecosystems regenerate unevenly, and political authority is contested. None of this fits naturally into a clean two-column statement.

The achievement of spreadsheet capitalism is to translate this mess into a global balance sheet, using the SACT layers as its organizing logic. Several factors need to be included, one of which is the ongoing process of tokenization, which works to itemize the messy world. Also, blockchains make that question more precise, more automated, and more global than ever before.

Substitution Turns Things into Claims

The first step is substitution. Physical assets, social relations, and future promises are converted into financial claims. A factory becomes a depreciable asset. A worker’s future labor becomes a wage obligation. A government’s authority becomes a bond. Risk itself becomes a tradable instrument.

Substitution does not eliminate material reality, but it displaces it. What matters is no longer the factory as such, but its valuation and its capacity to service debt. The world becomes legible as a collection of balance sheet entries. This is the moment when reality becomes financeable.

Abstraction Organizes the World into Balance Sheet Categories

Abstraction arranges these substituted claims into standardized categories. Assets are sorted by liquidity, duration, and risk. Liabilities are ranked by seniority and maturity. Complex processes such as supply chains, demographics, and climate exposure are reduced to variables that affect valuation. Abstraction allows for the comparison, aggregation, and stress-testing of radically different entities such as banks, corporations, households, and states within a single framework.

At this layer, the balance sheet becomes a theory of the world. Stability means matched maturities. Fragility means leverage. Sovereignty becomes fiscal space. Political uncertainty becomes a risk premium.

Symbolic Computing Makes the Balance Sheet Operate

Once inside the computer, these symbols can be manipulated mathematically. We can apply leverage, split them into tranches, insure them with derivatives, and project their value into the future using formulas (such as the Black-Scholes formula). The result is that the asset now has “financial energy” that can be moved, multiplied, and speculated upon at the speed of light, completely detached from the physical limitations of the original object.

Symbolic computing turns the balance sheet from a static description into a dynamic system. Spreadsheet formulas, financial models, and increasingly AI-driven systems continuously calculate liquidity ratios, duration mismatches, collateral haircuts, and stress scenarios.

This is where the balance sheet becomes active. It no longer waits for periodic reporting. It updates in real time. Small changes in prices trigger margin calls. Shifts in policy expectations reprice entire asset classes.

Judgment is embedded in formulas. Assumptions about risk, growth, and policy are encoded into functions that execute automatically. The balance sheet begins to govern behavior, not merely record it.

With Tecommunications Synchronization the Global Balance Sheet Comes Alive

Telecommunications synchronization binds these balance sheets together. Prices, positions, and risks are updated simultaneously across markets and time zones. Fiber optic cables, satellites, and high-frequency trading networks connect the spreadsheets of New York, London, Tokyo, and Shanghai. The balance sheet ceases to be local or institutional. It becomes global, interconnected, and continuous.

This synchronization is what allows analysts like Howell to speak meaningfully about “global liquidity.” Liquidity is no longer confined to a national banking system. It flows across borders through dollar funding markets, repo chains, and swap lines, all of which are synchronized in near real time.

This layer stitches all the local spreadsheets into one massive, pulsating Global Balance Sheet. It ensures that a change in the price of oil in Riyadh is instantly reflected in a balance sheet in Chicago. The result is a unified global market where “value” is determined by the synchronization of millions of connected spreadsheets. In this environment, a tightening in one part of the system is transmitted instantly to others. The global balance sheet expands and contracts as a single mechanism.

The Balance Sheet as a Worldview

The balance sheet’s power lies in its apparent neutrality. Mary Poovey’s A History of Modern Fact offers one of the most penetrating accounts of how modern economic knowledge came to appear objective, factual, and politically neutral. Her analysis of double-entry bookkeeping is especially useful for understanding how the concept of “balance” in accounting and economics emerged and how it was originally a rhetorical and epistemological innovation. They emerged as ways of persuading readers that numbers could speak truth independently of moral or political judgment.

When applied to contemporary spreadsheets, Poovey’s work helps us to understand that spreadsheet capitalism is not simply a more efficient continuation of accounting, but the culmination of a centuries-long effort to separate calculation from interpretation, and to naturalize that separation as fact. Numbers seem to describe reality rather than shape it. But spreadsheet capitalism reveals the opposite. The balance sheet is an active epistemology. It decides what counts, what can be measured, and what must be ignored.

Liquidity becomes the master variable because it determines whether the balance sheet can continue to grow. Debt becomes sustainable not because it disappears, but because it can be rolled, refinanced, and absorbed by expanding balance sheets elsewhere, often public ones.

In this sense, the balance sheet is both a tool and a metaphor for modern power. It explains why central banks matter more than legislatures in crises, why asset prices dominate politics, and why the global economy feels simultaneously integrated and fragile.

Conclusion

Unlike a firm’s balance sheet, there is no sovereign accountant of the world. No institution has jurisdiction over all assets, liabilities, and collateral chains simultaneously. Instead, the global balance sheet emerges from the aggregation of many partial balance sheets, stitched together through spreadsheet logic, standards, and telecommunications. Think of it less as a book and more as a constantly recomputed state of the system.

Spreadsheet capitalism builds a global balance sheet by transforming the world into a synchronized, computable set of claims. Through substitution, abstraction, symbolic computing, and telecommunications grids, it creates a system in which liquidity governs outcomes and balance sheets define possibility.

The ultimate question is no longer who owns the world’s assets,
but who controls the formulas that decide when assets remain liquid, solvent, and real. That is the true equity of spreadsheet capitalism.

In a debt-filled world, the central question is no longer who produces what, but whose balance sheet can expand when stress arrives. The answer to that question increasingly determines economic stability, political authority, and global hierarchy. The balance sheet, once a bookkeeping device, has become the architecture of the modern world.

Summary

The global balance sheet is an emergent object, not a master ledger
Unlike a firm’s balance sheet, there is no sovereign accountant of the world. No institution has jurisdiction over all assets, liabilities, and collateral chains simultaneously. Instead, the global balance sheet emerges from the aggregation of many partial balance sheets, stitched together through spreadsheet logic, standards, and telecommunications.

The danger, as highlighted by both Howell’s liquidity theory and the SACT framework, is decoupling. The Global Balance Sheet (built via Telecommunications and Computing) can expand infinitely. You can always add zeros to a spreadsheet. But the “Messy World” (Substitution) has physical limits. When the financial balance sheet demands more liquidity than the physical world can provide. This is the moment when the spreadsheet is forced to remember it is tethered to the real world. This is the moment of financial crisis.

Notes

[1] Howell’s idea is a conceptual, schematic spreadsheet of the global balance sheet. It is not a literal accounting statement but a computational map of how spreadsheet capitalism organizes the planet’s assets, liabilities, and residual equity through the SACT layers. Think of this as the minimum viable ledger that financial terminals, central banks, and AI models implicitly reconstruct every day.
[2] Mary Poovey’s History of Fact provides the “origin story” for Howell’s world. Howell’s Capital Wars are only possible because we have spent 500 years perfecting the Abstraction and Symbolic Computing that Poovey first identified in the journals of Renaissance merchants. The balance sheet isn’t just recording the economy; it is constituting it.
[3] A recent conversation with Dr. Greg Moses helped me consider the larger implications and how it connects to my work on spreadsheet capitalism and the SACT layers. Moses was important in helping conceptualize SACT because of our conversations about Peirce and semiotics.

AI Prompt: The “Balance Sheet” is a popular instrument and metaphor in the global economy, Describe what a balance sheet is and how it is used by financial analysts such as Michael Howell to describe the importance of liquidity in a debt-filled world. Describe how spreadsheet capitalism builds the global balance sheet from the messy world of things and processes, through symbolic computing, and telecommunications synchronization of the global financial system’s SACT layers of substitution, abstraction, symbolic computing, and telecommunications grids.

Anthony J. Pennings, PhD is a professor at the Department of Technology and Society, State University of New York, Korea and a Research Professor for Stony Brook University. He teaches AI and broadband economics and policy. From 2002-2012 he taught digital economics and information systems management at New York University. He also taught Digital Media at St. Edwards University in Austin, Texas, where he lives when not in Korea.

Protected: Spreadsheet Organization Precedes Production

Posted on | February 1, 2026 | Enter your password to view comments.

Category: artificial intelligence, democratic political economies, digital geography, digital media economics, dystopian economies, enabling frameworks, enterprise systems, financial technology, smart new deal, spreadsheet logic
Tags: AI computational governance > SACT (Substitution - Abstraction - Symbolic Computing - Telecommunications Synchronization) > SACT-AI > value form

Reviewing the New Deal’s Global Economy Framework and Its Current Challenges

Posted on | January 28, 2026 | No Comments

Citation APA (7th Edition)

Pennings, A.J. (2026, Jan 28) Reviewing the New Deal’s Global Economy Framework and Its Current Challenges. apennings.com https://apennings.com/how-it-came-to-rule-the-world/reviewing-the-new-deals-global-economy-framework-and-its-current-challenges/

Introduction

Before we lose January, I wanted to remind people of the preferred meaning of Jan 6 (Of course we will remember the attack on the capitol). In his 1941 State of the Union address on January 6th, FDR articulated the “Four Freedoms.” The first three (Speech, Worship, Fear) were standard democratic ideals, but the fourth was revolutionary for the US. “The fourth is freedom from want… which, translated into world terms, means economic understandings which will secure to every nation a healthy peacetime life for its inhabitants.”

Later that year, after the attack on Pearl Harbor and Hitler declared war on the US, these ideas became central Allied war aims, underpinning the Atlantic Charter (that ended the British Empire) and the UN Universal Declaration of Human Rights. It was the pivotal point in world affairs. FDR implicitly stated that globalizing the New Deal had become a US national security interest.

The result was that the USD became the world’s major liquidity currency (initially hampered by gold), Fthe United Nations was created (always hampered by the Security Council vetoes), and the US Navy became the ocean’s police, allowing countries like China to forgo their own protective navies and reducing the cost of their goods for countries worldwide. This system is currently under review.

Was the New Deal Socialism?

Except for Social Security, the term “socialism” wasn’t used much in the New Deal. It’s a small word considering the task ahead for the US and global system. FDR’s plans even preceded Keynesian economics. However, he did “contain” finance, which he saw as an unruly system that led to the Great Crash of 1929 and its global unstability. Part of that “containment” was a tax system with rates north of 90 percent for top earners.

It was a 15-year endeavor rebuild the US economy and to shape a new global system, expanding the New Deal into a world system with the Atlantic Charter, Bretton Woods, the Marshall Plan, and the UN, all of which were resisted by the USSR, helping facilitate the Cold War.

The New Deal as a global “Allies” solution morphed in the 1970s when we reached the limits of the dollar-gold standard (Triffin Dilemma). and USD trade went electronic with Reuters Monitor.[1] US debt expanded to provide the new “gold” backing for the global currency with US Treasuries. Financial containment was ended, and taxes were reduced. Computer networks replaced the telex, and spreadsheet logic dominated the new political economy with the Bloomberg Box, Excel, and China’s Wind, digitizing and privatizing wealth.

Pan-capitalism broke out in the 1990s with the end of the USSR and the “Atari Democrat’s” World Trade Organization’s “new rules” framework that opened the world to IP networks and digital devices, making China and the other Asian Tigers very rich. Privatized telecoms (like NZ Telecom) opened up the world to free video/voice calls and global social media networks like FB.

But just as the gold in Fort Knox had its limits, the US public grew nervous about the federal debt. Luckily, the US consumer’s trade deficit kept China and the USD global liquidity system functioning, but not without dollar shortages cropping up, as in 2008, and the persistent strong dollar we see today.

BRICS is a “Second World” attempt to challenge the US-led world order by seducing the Global South with the Belt and Road Initiative and calls for “de-dollarization.” But the failed SMO in Eastern Europe, and the breakdown of the Chinese economy, have crumbled the BRICS initiative.

It did challenge Walter Wriston’s “information standard” and turned investment and reserve hold to gold. China’s CIP has made inroads into the world’s payment systems traditionally dominated by SWIFT.[2] Fintech innovations, including AI, represent a major challenge to USD dominance as we move into an era of blockchain and tokenization.

The Trump solution has been a chaotic mixture of “America First” tariffs, ending foreign aid, USD-backed stablecoins (2027), and military escalation. Resentment is building worldwide, but global money is still flowing back along the “Milk Road” into the USD.

And to Usher’s point, the US liberal/progressive movement does not have a major focus on the political economy, either domestically or globally. Even Obama used the “deficit” card as if the US economy ran on “household” economics that are limited by income and credit card debt. But debt expanded rapidly with COVID-19 reigniting concerns about the deficits.

That is why I think FDR’s vision for the Great Depression, the transformation of US industrialization, and decolonization and global economic enablement are useful data points to consider going forward for both the US and the global order.

Summary

e attack on the capitol). In his 1941 State of the Union address on January 6th, FDR articulated the “Four Freedoms.” The first three (Speech, Worship, Fear) were standard democratic ideals, but the fourth was revolutionary for the US. “The fourth is freedom from want… which, translated into world terms, means economic understandings which will secure to every nation a healthy peacetime life for its inhabitants.”

The result was that the USD became the world’s major liquidity currency (initially hampered by gold), the United Nations was created (always hampered by the Security Council vetoes), and the US Navy became the ocean’s police, allowing countries like China to forgo their own protective navies and reducing the cost of their goods for countries worldwide. This system is currently under review.

The New Deal as a global “Allies” solution morphed in the 1970s when we reached the limits of the dollar-gold standard (Triffin Dilemma). and USD trade went electronic with Reuters Monitor. US debt expanded to provide the new “gold” backing for the global currency with US Treasuries. Financial containment was ended, and taxes were reduced. Computer networks replaced the telex, and spreadsheet logic dominated the new political economy with the Bloomberg Box, Excel, and China’s Wind, digitizing and privatizing wealth.

BRICS is a “Second World” attempt to challenge the US-led world order by seducing the Global South with the Belt and Road Initiative and calls for “de-dollarization.” But the failed SMO in Eastern Europe, and the decline of the Chinese economy, have crumbled the BRICS’ momentum.

The US liberal/progressive movement does not currently have a major focus on the political economy, either domestically or globally. Even Obama used the “deficit” card as if the US economy ran on “household” economics that are limited by income and credit card debt. But debt expanded rapidly with COVID-19 reigniting concerns about the deficits.

Summary

This blog post argues for reclaiming January 6th as the anniversary of FDR’s “Four Freedoms” speech (1941) rather than the date of the Capitol attack. The post traces the arc from FDR’s “Global New Deal” to the modern digital financial order.

It posits that FDR’s inclusion of “Freedom from Want” was a revolutionary pivot that transformed the US New Deal into a global security strategy. FDR realized that US national security depended on global economic stability. This philosophy underpinned the Atlantic Charter (decolonization), the UN (political forum), and the Bretton Woods system.

The US Navy became the “global police,” lowering trade costs for the world, while the US dollar provided liquidity. Crucially, FDR “contained” finance with high taxes and regulations to prevent the instability of the 1929 crash.

The shift from Gold to Spreadsheets (1970s–1990s) describes the collapse of the FDR order due to the Triffin Dilemma (the limits of the gold standard). In the 1970s, the US shifted from backing the dollar with gold to backing it with US Debt (Treasuries). Financial containment ended. The “telex” was replaced by computer networks (Reuters, Bloomberg, Excel). This digitized and privatized wealth, leading to “Spreadsheet Capitalism.”

In the 1990s, “Atari Democrats” and the WTO opened the world to IP networks, enriching the Asian Tigers and China. The post argues we are now reaching the limits of this debt-based system. The BRICS attempt to “de-dollarize” and curry favor in the South via the Belt and Road Initiative. But BRICS challenges are crumbling due to the failure of Russia’s military operation (SMO) and China’s economic breakdown. Global capital is still flowing back to the USD via the “Milk Road.”

The “Trump Solution” is a chaotic mix of tariffs, stablecoins, and military escalation. Meanwhile, modern liberals fail to understand political economy, joining the Republicans in treating the US budget like “household economics” rather than a tool for industrial transformation.

Notes

[1] A classic source on Bretton Woods and the Triffin Dilemma was Moffit, M. (1983) The World’s Money. NY: Simon & Schuster, Inc.
[2] Wriston’s interpretation of the Information Standard The Twilight of Sovereignty: How the Information Revolution Is Transforming Our World was organized around a rhetoric of assurance, not a critical analysis. He argued the power of multinational corporations, nation-state dictatorships, and any aggregation of power antithetical to democratic prospects will fall to the sovereign power of the information standard.

Anthony J. Pennings, PhD is a professor at the Department of Technology and Society, State University of New York, Korea and a Research Professor for Stony Brook University. He teaches AI and broadband policy. From 2002-2012 he taught digital economics and information systems management at New York University. He also taught in the Digital Media MBA at St. Edwards University in Austin, Texas, where he lives when not in Korea.

Category: democratic political economies, digital geography, enabling frameworks, enterprise systems, financial news, financial technology, geopolitical risk, global communications, global e-commerce, how IT came to rule the world, spreadsheet logic, sustainable development
Tags: FDR > Four Freedoms > New Deal

Global Liquidity Theory and the SACT Layers

Posted on | January 19, 2026 | No Comments

Citation APA (7th Edition)

Pennings, A.J. (2026, Jan 19) Global Liquidity Theory and the SACT Layers. apennings.com https://apennings.com/technologies-of-meaning/global-liquidity-theory-and-the-sact-layers/

Introduction

How does financial liquidity impact financial markets, asset prices, and geopolitical stability in the emerging context of an AI-driven political economy? Using my SACT (Substitution, Abstraction, Symbolic Computing, and Telecommunications Synchronization) layers framework, I’ll explore how Michael Howell defines and interprets global liquidity in his Capital Wars (2020), and how this liquidity impacts financial markets, asset prices, and geopolitical stability.[1]

Howell argues that modern financial markets are essentially debt-refinancing machines driven by liquidity (cash) rather than by real investment or fundamentals. In his view, asset prices (P) depend on the level of Global Liquidity (L) and investors’ risk positioning, not on traditional valuation metrics. He even encapsulates this as P = L × (P/L), meaning that a rise in liquidity proportionally inflates financial prices. This AI-produced image is suggestive of the processes that drive liquidity and as a consequence, asset values.

Howell notes that today’s global liquidity pool is on the order of $130 trillion, roughly two-thirds the size of world GDP. A policy of monetary easing tends to create asset bubbles (in stocks, bonds, real estate) while “high street” inflation stays low. In short, feeding the money-creation “engine” drives prices of existing assets skyward, but not consumer prices.

Howell measures liquidity as the aggregate balance-sheet capacity of the financial system. Liquidity includes not only central bank money but also the vast “shadow” funding markets (repos, commercial paper, eurodollars, etc.) that amplify credit. Because roughly 80% of lending is collateral-backed, crises in his framework come from collateral shortages, not mispricing.

When liquidity tightens (for example, when bond or MBS prices fall), margin calls trigger fire sales that cascade through the system. Thus, financial instability is an endogenous feedback loop: falling liquidity causes plummeting collateral values, which in turn trigger further liquidity withdrawals and forced selling. In this view, systemic risk is systemic. It is nondiversifiable. Credit and collateral chains bind all institutions together, so only broad “backstops” can arrest a collapse.
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Central banks play a key role in Howell’s theory as market backstops. He emphasizes that modern central banking is largely about the plumbing. It is about providing collateral support, not just setting interest rates. For example, the Fed’s quantitative easing (QE), repo operations and FX swap lines act to replenish cash and collateral in crisis. It acts as a Dealer of Last Resort for the system, providing liquidity to financial institutions that are experiencing difficulties.

Because the US dollar dominates global finance, the Federal Reserve effectively functions as the world’s lender of last resort. Empirical tests confirm that Fed liquidity expansions quickly ripple into asset markets. For instance, Howell finds the Fed’s balance sheet moves lead Bitcoin and other markets by several weeks. Conversely, Fed-driven dollar shortages (as in 2008 or 2020) trigger global “risk-off” episodes, since roughly 60% of world trade is dollar-denominated.

In Howell’s framework, therefore, liquidity expansions fuel booms (often inflating collateral values), while liquidity contractions precipitate busts via frozen funding and margin spirals.

Liquidity and the SACT Layers of Spreadsheet Capitalism

Howell’s liquidity paradigm can be linked to the SACT (Substitution–Abstraction–Symbolic Computing–Telecommunications) stack of “spreadsheet capitalism,” which describes how finance is digitized in layers starting with the substitution of the world’s items and processes, decontextualizes them so they can be categorized, and computes them in various formulas, and synchronizes the fruits of those calculations globally.

Substitution

Illiquid economic value is substituted by paper or digital claims on spreadsheets. For example, mortgages, loans or real assets are pooled and securitized or tokenized onto ledgers, converting them into tradable securities. In this way liquidity literally substitutes for real collateral. As Vladimir Gorshkov at State Street observes, “in tokenized form, assets are easier to move, and hence easier to trade, transfer, lend and borrow.”

Howell’s liquidity logic relies on this mechanism. By transforming fixed claims into liquid instruments, the global balance sheet expands, allowing new funding flows.

Abstraction

These liquid claims and flows are then quantified in spreadsheets and models. Liquidity shows up as numeric inputs in performance metrics, risk models or spreadsheets (for example, as global money?supply indices, safe-asset supplies or repo rates). In Howell’s terms, central banks and analysts track the financial sector balance-sheet capacity as a key variable.

The SACT “stack” literally turns the world into rows and columns of numbers. Modern trading platforms use formulas (NPV, VaR, FX conversions, etc.) to translate economic positions into cell values. In practice, global liquidity indices and spreadsheet models compute how much cash and collateral is available, feeding those figures into algorithms that value portfolios and assess risk.[2]

Symbolic Computing

Added to the spreadsheet layout are automated algorithms and AI. These “symbolic processors” (quant trading programs, risk engines, AI forecasters) ingest the liquidity data and act on it. For instance, a trading algorithm might use a VaR model (built on liquidity inputs) to rebalance a bond fund, or an AI “robo-treasurer” might forecast funding needs from a policy change. Howell’s own work highlights this: tools like BlackRock’s Aladdin or even private AI are constantly interpreting liquidity as numeric signals.

The result is fully automated “intragroup” liquidity movements in seconds, tightening hedges and delivering real-time treasury functions. This exemplifies the symbolic layer where algorithms turn liquidity numbers into trading decisions.
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Telecommunications Synchronization

Finally, high-speed networks synchronize markets around those numbers. Real-time data feeds tie global exchanges and terminals into one grid. As Pennings notes, the USD’s hegemony is reinforced by a “networked grid of financial terminals” that run these spreadsheets simultaneously worldwide.[2]

In effect, liquidity shocks propagate instantaneously through this telecom layer. For example, a Fed liquidity injection in New York is immediately reflected in price quotes in London and Hong Kong. Howell’s theory assumes such synchronization. When global liquidity rises or falls, markets from equities to foreign exchange move in unison, reflecting the connected spreadsheet infrastructure.

Toward an AI-Driven Political Economy

Looking ahead, these trends suggest a transition to an economy where liquidity is managed by code as much as by policy. Central banks and firms are increasingly treating money and assets as programmable, real?time instruments. For example, major financial institutions are issuing tokenized deposits and stablecoins that settle 24/7. One notable project combines 24/7 blockchain rails with tokenized bank deposits and a large AI model to create a global treasury network.

Stablecoins and tokenized U.S. Treasuries are already handling trillions of dollars in global payments (Tether/USDC move approximately $33 trillion annually). In parallel, central banks recognize that AI will reshape policy. The BIS urges that regulators must “anticipate AI’s effects” on markets and harness AI tools in their own operations.
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Conclusion

The convergence of Howell’s liquidity view and the SACT framework points to movement towards an automated, AI-governed finance where liquidity flows are tracked and even managed by algorithms (big-data stress tests, smart contracts, real-time token-ledgers) rather than solely by traditional politics.

Economies that have been operationalizing the SACT layers will move to continuous, machine-enforced “balance sheets” where every dollar or digital token is coded and monitored. This suggests a new political economy in which policy and markets are coded into the very fabric of the globalized financial spreadsheet terminals, requiring us to think of liquidity as a computational resource (subject to AI control) as much as a purely political one.

Summary

The blog post examines the intersection of Michael Howell’s financial theories and the SACT framework of Spreadsheet Capitalism to explain how global markets function, and how they are transitioning to an AI-driven era. It begins by presenting Howell’s core argument from his book Capital Wars which posits that modern financial markets are no longer driven by traditional investment or fundamentals but are instead giant debt-refinancing machines fueled contingently by liquidity.

In this view asset prices are determined mathematically by the level of global liquidity and the risk positioning of investors rather than by the actual value of the underlying assets. Howell encapsulates this relationship in a formula where a rise in liquidity proportionally inflates market prices. He notes that the global liquidity pool has grown to roughly $130 trillion which is significantly larger than the world GDP. Consequently, when central banks engage in monetary easing they tend to create asset bubbles in stocks and real estate rather than driving up consumer prices on the “high street.”

The narrative explains that Howell measures liquidity as the aggregate balance-sheet capacity of the financial system including both central bank money and the vast shadow funding markets. Because the majority of lending is backed by collateral, financial crises in this framework are caused by collateral shortages rather than mispricing. When liquidity tightens and collateral values fall it triggers a feedback loop of margin calls and forced selling that can only be stopped by central banks acting as the dealer of last resort.

The post then maps this liquidity paradigm onto the SACT layers of Spreadsheet Capitalism to show how the physical world is converted into financial data. It starts with Substitution where illiquid real-world items like mortgages or land are substituted by paper or digital claims. This legal process transforms physical objects into tradable liquid instruments that expand the global balance sheet. Next is Abstraction where these claims are decontextualized into spreadsheet cells and tracked as numeric inputs in risk models. This turns the complex world into simple rows and columns of data that can be processed by financial algorithms.

The process accelerates in the Symbolic Computing layer where automated algorithms and increasingly AI ingest this liquidity data to make trading decisions without human intervention. Finally the Telecommunications Synchronization layer links these disparate spreadsheets into a single unified grid. High-speed networks ensure that a liquidity shock in New York is felt instantly in London or Hong Kong as the entire system moves in unison. Programs like BlackRock’s Aladdin use these inputs to move capital instantly across the globe.

The summary concludes by looking toward an AI-driven political economy where liquidity is increasingly managed by code. As programmable money and smart contracts become more prevalent, the global economy is transitioning to a system of machine-enforced balance sheets. In this future, financial stability becomes a matter of software engineering and algorithmic governance as much as political policy.

Notes

[1] Most insights on geopolitical stability and financial liquidity are from Michael Howell, CEO of Crossborder Capital, and his book Capital Wars: The Rise of Global Liquidity (2020), focusing on the global balance sheet.
[2] From my talk to the Computer Science Department at SUNY Korea on Friday, October 24, 2025.
[3]The SACT Layers of Spreadsheet Capitalism include Substitution (The Legal Layer), where illiquid real-world items (mortgages, land) are substituted by paper or digital claims (securities, tokens). This process turns physical collateral into tradable liquid instruments, expanding the balance sheet. Abstraction (The Financial Layer) is where claims are decontextualized into spreadsheet cells. Liquidity is tracked as numeric inputs in risk models (e.g., VaR) and indices, converting economic positions into raw data. Symbolic Computing (The Algorithmic Layer) involves algorithms (like BlackRock’s Aladdin) that ingest this liquidity data to formulate trading and other financial decisions. “Symbolic processors” turn liquidity numbers into instant capital movements without human intervention. Telecommunications (The Global Synchronization Layer) involves high-speed networks that synchronize these spreadsheets globally. A liquidity shock in New York propagates instantly to London or Hong Kong via the “networked grid of financial terminals.”

Not to be considered financial advice.

Anthony J. Pennings, PhD is a professor at the Department of Technology and Society, State University of New York, Korea and a Research Professor for Stony Brook University. He teaches AI and broadband policy. From 2002-2012 he taught digital economics and information systems management at New York University. He also taught in the Digital Media MBA at St. Edwards University in Austin, Texas, where he lives when not in Korea.

Category: artificial intelligence, enabling frameworks, enterprise systems, financial technology, spreadsheet logic, sustainable development, technologies of meaning
Tags: Abstraction > balance sheet > Global Liquidity > SACT (Substitution - Abstraction - Symbolic Computing - Telecommunications Synchronization) > Symbolic computing

Silver, Anchored by Spreadsheet Logic

Posted on | January 11, 2026 | No Comments

Citation APA (7th Edition)

Pennings, A.J. (2026, Jan 11) Silver, Anchored by Spreadsheet Logic. apennings.com https://apennings.com/enterprise-systems/silver-anchored-by-spreadsheet-logic/

Introduction

Silver, like gold, occupies a distinctive position in the global financial system because it exists simultaneously as a physical material, an industrial input, and a financial asset. Its movement from the ground to the balance sheet illustrates with unusual clarity how the SACT layers of spreadsheet capitalism operate across the global financial infrastructure. Using my Substitution, Abstraction, Symbolic Computing, and Telecommunications Synchronization (SACT) framework, we can analyze how silver is mined, abstracted, computed, and traded through the global financial system that governs commodity metal markets.[1]

As physical material, silver has excellent electrical/thermal conductivity, as well as antimicrobial properties, which are highly valued for industrial applications in electronics, medical devices, solar panels, and chemical reactions. It’s a strong solder for electrical contacts and brazing alloys. Its antibacterial properties make it valuable for water purification and medical uses (e.g., dressings, instruments). It is an essential catalyst in producing chemicals such as ethylene oxide, used in antifreeze and plastics. With growing demand driven by clean energy technologies like solar panels and EVs, industrial demand for silver is increasing rapidly.

Silver’s modern life unfolds less on trading floors than inside financial terminals and the dense computational environments where spreadsheets, models, and real-time data converge. Platforms such as BlackRock’s Aladdin, Bloomberg’s “Box,” LSEG’s Workspace, and China’s Wind do not merely display silver prices; they organize how silver is seen, valued, hedged, and governed. Across all of them, the USD functions as the universal reference frame, anchoring substitution, abstraction, computation, and synchronization at a planetary scale.[2] Silver may be dug from the earth, but its economic power today is exercised throughout networked digital terminals.

In each terminal, silver appears first as a ticker (XAG/USD for spot silver, SI for silver futures), a symbol that substitutes physical metal with a continuous numerical stream. Whether it is spot silver, COMEX futures, OTC forwards, ETFs, or options, the terminal renders silver as a time-series ready for computation.

Symbolic computing is where terminals stop being informational and become governing technologies. The metal is continuously transformed into a set of executable relationships — prices, probabilities, correlations, and constraints — that allow silver to function as a global financial instrument. When explicitly placed within the SACT framework, symbolic computing emerges as the layer in which silver’s physical reality is subordinated to calculative authority and in which spreadsheet logic actively produces market behavior rather than merely reflecting it.

It is useful to examine each of the terminals in more detail to look at their similarities across terminals, which mask important differences in emphasis:

– Bloomberg prioritizes market discovery and cross-asset comparison.
– LSEG Workspace (formerly Refinitiv Workspace/Eikon) emphasizes benchmark pricing, compliance, and institutional workflows.
– Aladdin embeds silver (XAG) as a financial instrument inside portfolio-wide risk and optimization systems.
– Wind integrates silver into China’s industrial planning, hedging, and macro-financial analysis.

Despite these differences, all operate within the same underlying logic of spreadsheet capitalism. Silver is not marketed simply by supply and demand in the physical sense. Instead, it is governed by how its material reality is progressively transformed into calculable, tradable, and synchronized symbols. Silver is governed in real time and denominated primarily in USD. What follows situates silver trading inside these spreadsheet-based financial terminals using the SACT framework and shows why dollar centrality is not incidental but structural for silver commodity markets.

Substitution Transforms Silver from Ore to Standardized Units

Silver begins as a geographically embedded material resource. It is mined primarily as a byproduct of copper, lead, zinc, and gold extraction. Supply originates mainly from countries such as Mexico, Peru, China, Australia, and Poland. At the mine level, silver exists as ore with varying grades, impurities, and extraction costs. None of this heterogeneity is directly tradable in global markets.

Substitution is the first step that allows silver to enter the spreadsheet economy. Assays translate ore into grams or ounces of recoverable silver. Refining processes then substitute this heterogeneous material into standardized forms such as bars, ingots, coins, or grain with certified purity, typically .999 or .9999 fine.

The physical complexities of geology and metallurgy are replaced by standardized units such as the troy ounce, the global accounting unit for precious metals. Mining output is converted into standardized measures: grams per ton of ore, ounces recovered, purity levels.

Crucially, silver substituted into troy ounces becomes the universal unit that allows silver mined under radically different conditions to become exchangeable. Once denominated in ounces, silver is no longer Peruvian or Chinese or Australian. It is globally fungible. At this point, silver exists less as metal than as a set of numbers capable of being priced, hedged, and pledged as collateral.

In SACT terms, silver becomes a quantity multiplied by purity, recovery rate, and cost. These figures are immediately translated into spreadsheet columns and rows. The mine itself becomes a production profile: costs per ounce, recovery rates, reserve estimates, expected mine life. Once this substitution is complete, silver is no longer tied to a specific mine or geography.

Silver Abstracted as Category, Inventory, and Balance-Sheet Entry

After substitution, silver is abstracted. Abstraction removes silver from its physical context and embeds it within financial categories. It is classified, categorized, and represented in forms that enable governance and comparison across networked space. In spreadsheets across banks, commodity traders, and hedge/sovereign funds, silver is no longer tracked as bars or coins but as:

– Spot prices
– Forward curves
– Inventory levels
– Cost curves
– Volatility measures
– Correlations with gold, copper, inflation, and currencies

Each abstraction corresponds to a different spreadsheet model. In corporate spreadsheets, silver appears as inventory, reserves, or byproduct revenue. In national accounts, it is recorded as part of mineral output and export earnings. In financial markets, it becomes a commodity class with standardized tickers and contract specifications.

Abstraction strips silver of its physical idiosyncrasies. A bar in a London vault, a futures contract in New York, and a mining reserve estimate in Peru can be compared and aggregated because they are all rendered within the same abstract categories. Spreadsheet logic governs silver not as a metal but as a set of variables: quantity, grade, price, volatility, and correlation. This abstraction allows silver to be integrated into portfolios, indexes, and risk models alongside equities, bonds, and currencies, despite its very different material origins.

Mining companies are valued using discounted cash flow models based on expected silver output. Industrial users treat silver as an input cost to be minimized. Investors treat it as a macro signal tied to monetary conditions. These abstractions allow silver to circulate across institutional domains that never touch the physical metal. A solar panel manufacturer in Germany, a hedge fund in New York, and a central bank analyst in Asia all “see” silver through different spreadsheet lenses, yet they coordinate through shared abstractions.

Symbolic Computing Determines Pricing, Hedging, and Leverage

Symbolic computing is where silver’s financial life unfolds. Pricing, trading, and risk management are executed through formulas embedded in spreadsheets, throughout trading systems, and within financial models. Silver prices are derived from continuous symbolic computation of spot prices, futures curves, options models, and arbitrage relationships. A mine’s expected output feeds into discounted cash flow models. Refiners hedge exposure using forward contracts. Manufacturers lock in costs using derivatives. Investors model silver futures as a hedge against inflation, currency debasement, or geopolitical risk.

Formulas determine margin requirements, collateral haircuts, and position limits. A rise in volatility triggers automated adjustments. These calculations do not merely reflect the silver market; they shape it. Capital flows respond to spreadsheet outputs long before physical silver moves.

At the compute level, silver functions less as metal and more as a mathematical object whose value emerges from computational relationships. Silver prices are produced not by direct exchange of metal, but by continuous calculation across futures markets, options chains, and derivative contracts. Spreadsheets and trading systems compute:

– Spot prices from futures curves
– Implied volatility from options
– Margin requirements from price swings
– Hedge ratios for producers and consumers

A mining company hedges future production by locking in prices through futures contracts. A trader models silver’s sensitivity to interest rates or dollar strength. An ETF issuer balances physical holdings against share creation and redemption flows. These are not descriptive acts. They are performative. The formulas used to model silver directly influence how much is mined, stored, or sold. Symbolic computing does not merely reflect silver’s value; it helps create it.

This is where silver’s dual nature becomes visible. It is one of the few commodities where “paper” claims vastly exceed physical supply, making spreadsheet representations more liquid than the metal itself.

Telecommunications Synchronization Creates One Price in Many Places

The global silver market synchronizes through telecommunications networks that link exchanges, vaults, refiners, banks, and traders in real time. Prices discovered on the COMEX in New York, the LBMA in London, and exchanges in Shanghai and Mumbai update continuously across the spreadsheet logic of globally networked financial terminals.

This synchronization enforces the “law of one price” despite vast differences in geography. A supply disruption in Mexico or a surge in industrial demand in China is instantly incorporated into global prices. Silver’s market time becomes universal.

Spreadsheet terminals drawing from live data feeds ensure that mining companies, bullion banks, and investors around the world respond simultaneously. Inventory reports, warehouse receipts, and delivery notices are transmitted instantly. Decisions made in one financial center propagate globally within seconds, coordinating behavior without direct communication.

This synchronization produces a single operational silver price despite fragmented physical markets. A mine shutdown in Mexico, a solar subsidy announcement in Europe, or a change in US interest rates is absorbed into the global price within seconds. Time–space distanciation is total. Silver mined today is priced against expectations of industrial demand, monetary policy, and speculative flows years into the future.

Silver as a Hybrid Asset in Spreadsheet Capitalism

Silver’s uniqueness lies in its hybrid role. It is both a monetary metal and an industrial input. This dual identity is handled through spreadsheet logic rather than political decree.

Industrial demand for electronics, solar panels, and medical applications is modeled as consumption curves. Investment demand is modeled as portfolio allocation. These distinct uses coexist in the same spreadsheets, allowing silver to oscillate between commodity, hedge, and speculative asset depending on modeled conditions.

This hybridity makes silver especially sensitive to shifts in abstraction and symbolic computing. Changes in inflation expectations, green energy policies, or monetary regimes can reclassify silver’s role almost instantly within financial models.

This substitution does more than simplify trade. It places silver inside the dollar liquidity system, making access to silver markets contingent on access to USD funding, dollar clearing banks, and dollar-based credit lines.

Terminals reinforce this substitution by default. Even when local currency views are available, the primary frame is USD. Silver’s global fungibility depends on this monetary anchor.

Silver as a Dollar-Synchronized Spreadsheet Asset

Silver’s journey through Aladdin, Bloomberg, LSEG, and Wind reveals how deeply commodity markets are embedded in spreadsheet capitalism. These terminals do not merely reflect silver markets; they constitute them by defining how silver is substituted, abstracted, computed, and synchronized.

At the center of this system sits the USD, not as ideology, but as infrastructure. The dollar enables silver to function as a global financial instrument rather than a regional metal. It allows spreadsheets in New York, London, Beijing, and Zurich to speak the same numerical language.

Silver may be dug from the earth, but its power today is exercised in spreadsheet-based financial terminals. It is priced in dollars, governed by formulas, synchronized across networks, and traded less as metal than as a financial signal within the global USD-based spreadsheet order.

In this sense, silver is not a relic of pre-modern money. It is a living example of how ancient materials are absorbed into the most advanced architectures of time–space power.

Conclusion: Silver as Material Anchored by Spreadsheet Logic

Silver’s journey from mine to market illustrates how global finance governs material reality through SACT layers. The metal itself does not circulate freely; its spreadsheet representations do. Substitution standardizes it. Abstraction categorizes it. Symbolic computing prices and allocates it. Telecommunications synchronization ensures that this process operates globally and continuously.

In spreadsheet capitalism, silver remains valuable precisely because it is material, scarce, and physically constrained. Yet its power and price are determined less by where it is mined than by how it is calculated. Silver stands as a rare bridge between the physical world and the abstract financial architectures that now coordinate global political economies.

Notes

[1] I developed the SACT layers approach in July 2025 while reviewing my previous work on spreadsheets, and specifically examing the notion of substitution using ideas from semiotics and the semosis of formulas, as well as a personal favorite, Mary Poovey’s History of Modern Fact.
[2] Much of my application of the SACT layers has been to examine the role of the USD and the power of its network effects, including Eurodollars in global spreadsheet capitalism. See Pennings, A.J. (2025, Nov 30) The Seven Phases of Global US Dollar Transformation: Past and Future. apennings.com https://apennings.com/crisis-communications/the-seven-global-phases-of-past-and-future-us-dollar-transformations/
[3] Several prompts were used to gather and organize information under my SACT layers approach from Chat GPT. Hypertext links are used to connect to sources.

Not to be considered financial advice.

Anthony J. Pennings, PhD is a Professor at the Department of Technology and Society, State University of New York, Korea and a Research Professor for Stony Brook University. He teaches engineering economics, as well as AI and broadband policy. From 2002-2012, he taught digital economics and information systems management at New York University. He also taught in the Digital Media MBA at St. Edwards University in Austin, Texas, where he lives when not in Korea.

The SACT Attack: How Spreadsheet Capitalism Conquered the World

Posted on | January 3, 2026 | No Comments

Citation APA (7th Edition)

Pennings, A.J. (2026, Jan 03) The SACT Attack: How Spreadsheet Capitalism Conquered the World. apennings.com https://apennings.com/democratic-political-economies/the-sact-attack-how-spreadsheet-capitalism-conquered-the-world/

The modern world was not conquered by force of arms, nor even by ideology alone, but by a quieter and more durable weapon that facilitated unique ways of seeing, representing, calculating, and coordinating. This weapon been the major armament of the global financial system that now spans hundreds of countries and involves trillions of US dollars (USD) and other forms of modern wealth. It rests on a historically layered techno-epistemology so profoundly embedded in the modern world that it seems quiet, objective, stealthy, and even inevitable.

This technological framework can be understood through four mutually reinforcing capabilities: Substitution, Abstraction, Symbolic Computing, and Telecommunications Synchronization (SACT). These come together in the modern digital spreadsheet “logic” and the globally connected gridmatic screens. At the heart of this achievement lies a powerful, interactive human-knowledge framework that has quietly underwritten what I call “spreadsheet capitalism,” a central thrust for the modern global political economy.

The “SACT attack” is not an event but a condition. It names the historical convergence through which older media technologies, mathematical notation, and networked communication fused into a digital technology that renders the world’s political economy as a grid of interchangeable values and mobilized capital.

The assault did not arrive with a bang, nor with the rumble of tanks across a border. The conquest of the modern world was silent, illuminated early by the cool, green glow of a cathode ray tube, then by multiple high-definition screens of financial news and transacting terminals. The SACT attack was a techno-epistemological coup d’état that upset the world of open-outcry trading pits, tacit trading reflexes, and telephone/telex communication. It reorganized the planet, not according to geography or ideology, but according to the fintech logic of the visual grid, increasingly tied together with clouds of datasets.

In the process called “remediation,” new media integrate older forms of established media.[1] Spreadsheet capitalism is based on the remediation of historical numerical and media practices into the modern digital spreadsheet. These include Indo-Arabic numerals (1,2,3,4,5,6,7,8.9) with the zero (0) and a base-10 decimal system within a positional place-value notation (1,000). Media include vertical columns and horizontal rows drawing on the political/military use of lists, and extensive 2-D visual tables used for tabulating corporate and national wealth. The digital spreadsheet uses intersected cells with Unicode multilanguage inscription, and connects data in separate cells with symbolic formulas.[1a]

These came together into a new techno-knowledge that reshaped modern financial and organizational processes. But the world did not simply stumble into this global coordination; it built epistemological authority on established practices like double-entry bookkeeping and statistics. It built on the information tools shaped since the telegraph and its need for “data processing.” It also built related accounting and financial knowledge in business schools, and statistics in science and social science education. Many formulas came from engineering.

This techno-knowledge empowered Tom Wolfe’s “Masters of the Universe,” the bond traders, the quants, the central bankers who run the world’s financial system in his (1987) Bonfire of the Vanities.[2] They did not invent their tools from scratch. Instead, they drew on remediated technology some of which thousands of years of media practices into a single, lethal interface: the digital spreadsheet terminal. The “masters” used this technology to create a global system of digitally-enabled, and increasingly blockchain-connected financial system. They used it to create new debt and credit instruments that registered, loaned, and traded hundreds of trillions of dollars. They developed a computing alchemy that resulted in an endlessly recomputable, instantaneously synchronized, and globally enforceable system for coordinating the accumulation of organizational and national wealth.

This post continues a story of how spreadsheet capitalism came to govern our working reality by quietly reorganizing finance, governance, and global “time-space power.”[3] It is a narrative that frames SACT not as a conspiracy or a single technology, but as a historically layered techno-epistemological trajectory that has quietly reorganized finance, governance, and power. I’ve kept the tone critical but analytic, grounding the argument in media history and the remediation of previous tools in modern technology rather than moral panic, and explicitly linking spreadsheets, PCs, and financial terminals to the production of economic and social power.

Substitution Replaces the World with Tokens

At the foundation of spreadsheet capitalism lies substitution. The SACT epistemology recognizes that the physical world is messy, heavy, and slow. To manage it, one must replace particulars with a signifier, sometimes called a token, usually a number or a word. This process is the replacement of concrete physical goods, people, social relationships, and lived time with symbolic stand-ins. Under the spreadsheet’s logic, a house is no longer a shelter made of brick and wood; it is replaced by a cell entry containing a “Mortgage-Backed Security” (MBS) value. A barrel of oil is not fuel; it is a futures contract.

Substitution is the first step toward constituting and coordination of meaning. Because meaning is difficult to “fix” and police, the spreadsheet provides a structural framework, drawing on historical information practices, to organize it. Digital spreadsheets remediate centuries-old writing techniques such as tallies, ledgers, and double-entry bookkeeping into a system where economic reality becomes divisible, legible, portable, and actionable. Assets become rows, contracts become entries, and future commitments become manageable obligations.

This logic draws on a long lineage of media practices: tallies, ledgers, double-entry bookkeeping. But digital spreadsheets remediate these earlier forms into a system where substitution is total and reversible. Anything that can be named can be assigned a cell; anything in a cell can be copied, moved, or deleted. Items in cells can be integrated into functions and formulas.

The signifier (the number) didn’t just represent the signified (the asset); it replaced it. The “Masters of the Universe” stopped looking at the world and started looking at the screen. Money has always done this, but the spreadsheet radicalizes the process. Assets become rows. Columns become categories. People become accounts. Futures become discounted cash flows.

In this SACT regime, land is substituted by real estate securities, labor by productivity metrics, risk by volatility measures, and governance by compliance checklists. The spreadsheet does not merely represent reality, it becomes the operational reality within which decisions are made.

Abstraction Erases Friction by Detaching Context

Substitution alone is insufficient without abstraction. The power of spreadsheet capitalism lies in its ability to strip away context while preserving calculability. Abstraction sacrifices meaning for a gain in interoperability. This process is anchored in Indo-Arabic numerals, including zero, base-10 decimals, and positional place-value notation. These notational, signifying systems, remediated into digital form, allow quantities to expand exponentially and be manipulated independently of their origins. Time, risk, and obligation are flattened into comparable units. Abstraction allows value to be detached from local contingencies and made globally comparable.

Abstraction enables scale. It allows financial instruments to circulate globally, detached from the political, ecological, or social conditions that produced them. In the spreadsheet, all debt looks the same. A dollar of debt in Detroit becomes commensurable with a dollar of debt in Jakarta. Abstraction allows billions of participants to operate within a shared economic language. The spreadsheet is the machine that performs this abstraction millions of times per second, without fatigue or reflection.

Symbolic Computing Formulates Judgment and Power

With the world substituted and abstracted, symbolic computing takes over. Through formulas and algorithms, cells began to talk to each other. The spreadsheet is not a static paper ledger; it is a computational environment. This capability remediates centuries of mathematical reasoning and accounting practice into programmable logic. Symbolic computing is the engine of the SACT attack.

Once quantities are encoded numerically and placed into cells, formulas can act upon them. What appears as a neutral function in formulas like NPV(), VAR(), and correlation matrices becomes a crystallized theory of the world and its future. Assumptions about growth, risk, and rationality are embedded in code, repeated automatically, and rarely questioned. Formulas remediate earlier practices of calculation, accounting, and statistical reasoning, but they do so with unprecedented speed and authority due to the availability of microprocessing “compute.”

These spreadsheet formulas rose to prominence during the leveraged buyout (LBO) period of the 1980s, when they were used to break down and sell off some of the largest corporations in the US. Spreadsheets had a paper-based life before the digital spreadsheet, but the speed and interactivity of the personal computer made spreadsheets like VisiCalc and Lotus 1-2-3 the “killer apps” that often justified the purchase of the new information machines. The results of spreadsheet formulas convinced investment banks to lend short-term loans to “raiders” who would buy up companies, sell off parts to repay the loans, and keep a substantial profit.

IF, VLOOKUP, and SUMPRODUCT commands allowed the spreadsheet to simulate possible futures. “If interest rates rise by 0.5%, then the value of Cell D12 drops by 40%.” This computational power allows the creation of “synthetic” value, an artificial construct that mirrors the value or performance of a real-world asset or dataset without direct ownership. Money could be begotten of money, without ever “touching the ground.” The positional place-value notation meant that shifting a decimal point, adding a zero, or applying a leverage formula could conjure trillions of dollars of notional value.

Symbolic computing turns finance into a self-referential system. Models generate prices that validate models. Risk systems define what counts as risk. The spreadsheet becomes an epistemic enclosure, as what cannot be symbolically computed effectively ceases to exist.

Spreadsheets do not replace human judgment; they amplify it. Symbolic computing transforms abstraction into action, a process called semiosis. Once values are encoded numerically and organized into cells, formulas can operate on them, enabling automated calculation, forecasting, and optimization. They allow institutions to model scenarios, manage risk, and allocate resources at speeds and with consistency that would otherwise be impossible.

We face a situation in which symbolic computing completes the abstraction process by automating reasoning. Judgment migrates from human deliberation to computational execution. (SACT)AI in another post examines the influence of AI on symbolic computing and the other layers of spreadsheet capitalism. It addresses the future of human action and computation in global finance, particularly through inference from a wide range of data scanned, scraped, and scrubbed from the World Wide Web and other sources of crowdsourcing and sensing from the Internet of Things (IoT).

Telecommunications Synchronization through the Global Grid

The final component of the SACT stack is telecommunications synchronization. A spreadsheet is powerful in isolation; it becomes world-shaping when synchronized across global networks. Fiber-optic cabling, Earth-orbiting satellites, Application Programming Interfaces (APIs), and financial terminals ensure that the same abstractions appear simultaneously in New York, London, Singapore, and São Paulo.

This synchronization remediates the telegraph, the ticker tape, the telex, and the newspaper into a real-time global ledger of financial terminals that computes data and news into trading algorithms. Prices, yields, and positions update continuously, enforcing a single temporal regime: market time. Local rhythms, such as ecological cycles, labor schedules, and democratic deliberations, are subordinated to synchronized global financial clocks.

Telecommunications transforms spreadsheets from terminal tools into network infrastructures. They allow assets and liabilities to circulate instantly, anchoring global trade and debt. Network effects come into play favoring the Bloomberg terminal, but also the US dollar that operates prominently in the current spreadsheet logic as the absolute relative value in most calculations. As a result, the spreadsheet-enabled trade system has facilitated the USD becoming the major solution for global liquidity and wealth storage.

Telecom facilitates the time-space power of spreadsheet capitalism. Money can flow from a pension fund in California to a construction project in Dubai and back to a hedge fund in the Caymans in seconds. This speed eliminates the ability for human reflection. The market became a “real-time” entity, reacting to news before it was humanly understood.

The Masters of the Universe and the Dollar Grid

Together, SACT forms the epistemic back the bone of modern spreadsheet capitalism. It empowers Tom Wolfe’s “Masters of the Universe.” This honor was bestowed not because they are uniquely intelligent, but because they operate fluently as the high priests of this symbolic regime.

The spreadsheet is transformed from a tool into a global infrastructure. Fiber optics and satellites synchronize financial data in real-time across the globe (New York, London, Tokyo), enforcing a single “market time” that overrides local rhythms. This speed prevents human reflection and solidifies the US Dollar as the absolute relative value in global calculations.

The global financial system serves as a meta-layer over the physical world. In this “gridmatic” infrastructure, hundreds of trillions of dollars in debt and derivatives hover above the planet’s actual GDP. With spreadsheets, terminals, and synchronized networks, financial elites constructed a global system of USD-enabled trade, credit, derivatives, and shadow banking that now exceeds the size of the real economy by an order of magnitude. Hundreds of trillions of dollars in obligations circulate as abstractions, enforceable through legal, technical, and monetary power.

This is not merely commodity or fiat money; it is spreadsheet money: money whose legitimacy derives from internal and networked consistency within symbolic systems rather than from social consensus or material backing alone.

Telecommunications transforms spreadsheets from terminal tools into network infrastructures. They allow assets and liabilities to circulate instantly, anchoring global trade and debt. Network effects come into play, favoring the Bloomberg terminal, but also the US dollar that operates prominently in the current spreadsheet logic as the absolute relative value in most calculations. As a result, the spreadsheet-enabled trade system has facilitated the USD becoming the major solution for global liquidity and wealth storage.

Conclusion: An Insidious Epistemology

The modern world has been reshaped not by military force, but by a quiet, techno-epistemological “coup d’état” that I call the spreadsheet capitalism.[] It represents the SACT’s victory of the digital organizational grid over the chaotic reality of the physical world. By fusing remediation of numerical, mathematical, and writing tools with modern telecommunications, the digital spreadsheet has constructed a global “gridmatic” reality where the ability to substitute, abstract, compute, and synchronize data equates to power over human, financial, and material resources.

This system has done more than merely optimize finance; it has created an epistemic enclosure where only that which can be counted and computed is acknowledged as real. As we move toward an era of AI-driven symbolic computing, the “Masters of the Universe” no longer just read the markets; they operate the operating system of the planet itself, creating a world where time, space, and value are defined by the logic of the cell, the table, and the formula.

The danger of the SACT attack lies not in malice but in invisibility innovation, and performance. Spreadsheet capitalism presents itself as rational, objective, and technical, while quietly reshaping what can be known, valued, and governed. Political choices appear as technical constraints. Ethical questions dissolve into optimization problems. Because the digital spreadsheet remediates older media so seamlessly, it feels familiar, inevitable, and even boring. Numbers, language, tables, formulas combine Yet its scale, speed, and synchronization have no historical precedent.

To name the SACT stack is not to reject computation or coordination, but to recognize that the modern financial order is built on specific media choices, not universal truths. Understanding the SACT attack opens space for alternative epistemologies such as forms of accounting that re-embed context, slow synchronization, and the restoration of human judgment. Without such interventions, the grid will continue to expand, substituting the world with symbols until the symbols themselves are all that remain.

Notes

[1] Bolter, Jay David, and Richard Grusin. Remediation: Understanding New Media. Cambridge, MA: MIT Press, 2000. Exploring spreadsheet technology through the lens of “remediation,” where older media forms are incorporated into newer ones gives us additional insights about their capabilities and effectiveness. Financial news, for instance, remediates print (textual data) and speech (anchors) within the televisual medium, which itself now incorporates web techniques and enables programming like Bloomberg TV and CNBC. Two key concepts from Bolter and Grusin’s theory of remediation are the logics of transparent immediacy and hypermediation. The first strategy aims to make the medium itself disappear, offering an immersive, seemingly unblemished, and “authentic” experience of the reality being presented. In financial news, this is partly achieved through the authoritative presence of news anchors who guide narratives and conduct live interviews, fostering a sense of direct access to information and expertise. “Breaking News” segments and live reports further enhance this feeling of immediacy. Conversely, the hypermediation strategy foregrounds the medium by integrating multiple data streams, windows, charts, graphs, and scrolling tickers – reminiscent of a computer interface or sports “datatainment.” This approach offers an augmented, quantitative view of the world, drawing on the perceived truth of numeracy and remediating tools like spreadsheets. Financial news relies heavily on this, displaying a constant flow of stock prices, commodity values, and economic indicators.
[1a]Unicode replaced ASCI that remediated British banking penmanship trained for legible ledgers. British banking penmanship historically favored clear, legible cursive styles like Copperplate (English Roundhand) for formal business and financial documents.
[2] Tom Wolfe’s “Masters of the Universe” is from his Bonfire of the Vanities novel that was also turned into a motion picture. It was about a bond trader whose world comes crashing down after a hit and run accident.
[3] Giddens, Anthony. (1983) A Contemporary Critique of Historical Materialism. (Berkeley, CA: University of California Press). p 117.
Giddens, A. (1983) The Nation-State and Violence. (Berkeley, CA: University of California Press). These two volumes were particularly influential in my graduate work theorizing digital money. Also see my analysis with Patrick Rose of spreadsheets in organizations.
[4] I developed the SACT layers – substitution, abstraction, symbolic computing, and telecommunications synchronization to construct an understanding of “spreadsheet capitalism” that now governs much of our economic reality. It was a term I heard from my mentor Majid Tehranian during the 1980s. Prof. Tehranian was an Iranian who fled before the theocratic regime took power in 1979 and was a professor at the University of Hawaii at the time.
Prompt: Construct a narrative about the “SACT attack” on the modern world. Describe how Substitution, Abstraction, Symblic computing, and Telecommunications synchronization (SACT), the foundations of spreadsheet capitalism have combined to introduce an insidious techno-epistemology shaping modern financial practices. Based on the remediation of historical media practices into the modern digital spreadsheet (Indo-Arabic numerals with the zero and base-10 decimal system within a positional place-value notation, unicode language capability, lists, tables, cells, and formulas) this technology has empowered the ‘masters of the universe” to create a global system of USD-enabled trade and debt that has extended into hundreds of trillions of dollars.

Not to be considered financial advice.

Anthony J. Pennings, PhD is a Professor at the Department of Technology and Society, State University of New York, Korea and a Research Professor for Stony Brook University. He teaches AI and broadband policy. From 2002-2012 he taught digital economics and information systems management at New York University. He also taught in the Digital Media MBA at St. Edwards University in Austin, Texas, where he lives when not in Korea.

Seven Phases of Global US Dollar Transformation: Past and Future

Posted on | November 30, 2025 | No Comments

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Pennings, A.J. (2025, Nov 30) The Seven Phases of Global US Dollar Transformation: Past and Future. apennings.com https://apennings.com/crisis-communications/the-seven-global-phases-of-past-and-future-us-dollar-transformations/

Introduction

Below is a brief historical overview and future preview of the US dollar’s transformation from a gold-backed sovereign currency to a debt-backed global standard for central bank reserves and trade invoicing. President Franklin Delano Roosevelt (FDR) built vaults at Fort Knox in Kentucky during the Great Depression and moved gold bars there from New York. He wanted to protect them from a foreign invasion of Manhattan and to be extra safe, it was a tank training ground. As gold poured into the US during World War II, the stage was set for the US dollar to take the reins from the declining British pound as the world’s predominant currency and source of liquidity.

This post traces the US Dollar (USD) from a global gold-backed currency to a fiat currency to a programmed, algorithmic instrument of global power, with stablecoins on blockchain, and in multicurrency collaboration with several AI blocs. It outlines the transition through seven distinct phases, highlighting how the US has repeatedly adapted its monetary infrastructure to supply with world with a liquidity solution, and yet maintain economimc hegemony

The Bretton Woods system pegged the global economy to the USD, which was backed by gold. However, the Triffin Dilemma revealed a fatal flaw: to provide international liquidity, the US had to run deficits, undermining trust in the gold peg. This tension led France and others to drain US gold reserves, labeling the system an “exorbitant privilege.”

A shadow banking system emerged in London to hold dollars outside US jurisdiction (driven by Soviet and Chinese fear of seizure). This Eurodollar market operated via telegraph, telex, and later SWIFT, creating a proto-digital “ledger money” that bypassed physical gold constraints to supply USD worldwide as bank credit.

The “Nixon Shock” (See video) ended gold convertibility. The dollar floated, anchored only by state power, the Group of 5 (G-5) and the Group of 10 (G-10), and the technological innovation of Reuters called Monitor that provided a virtual market for FX.[1] The petrodollar deal with Saudi Arabia cemented the USD’s dominance and increased demand for US debt. Citibank’s Walter Wriston argued that gold had been replaced by an “Information Standard,” where currency value was determined by market judgment and financial news processed through global telecommunications.

Under President Ronald Reagan, the Euromarkets anchored the dollar to US government debt. Massive US deficits produced US Treasuries, which became the “prime collateral” for the Eurodollar market. The world’s central banks shifted reserves from gold to US debt, effectively turning the US deficit into the global savings account.[2]

The debt-backed system was insufficient for the growth in global trade. It caused volatility and shortages, antagonizing the world, especially the Global South. The BRICS nations (Brazil, Russia, India, China, South Africa) sought to capitalize on this unease and pushed to de-dollarize finance and trade using alternative payment rails (CIPS) but failed to displace the USD due to a lack of deep, liquid collateral.

The US has responded to de-dollarization with a technological offensive. Riding on the back of cryptocurrencies, the Genius Act mandates stablecoins must be backed 1:1 by US Treasuries. This policy creates a “sovereign digital dollar” that moves instantly on blockchains but is anchored by US debt. Penetrating globally, it challenges local currencies with a programmable, US-controlled asset that relieves the US debt pressure.

Artificial Intelligence (AI) fundamentally alters the friction of global trade. AI agents automate compliance, hedging, and routing, making a multicurrency world computationally feasible. While the USD remains the backbone, AI enables an “algorithmic polycentrism” in which payment paths are optimized dynamically, potentially reducing the dollar’s exclusivity while maintaining its structural power through private stablecoin networks.[3]

Phase 1: The Golden Anchor and the Triffin Dilemma (1944–1971)

The modern story of the global dollar begins at the Bretton Woods Conference in 1944. The Allied powers established a system where the US dollar was the world’s reserve currency, pegged to gold at $35 per ounce, while other currencies were pegged to the dollar. This connection created a system of fixed exchange rates that provided post-war stability. Japan, for example, was brought in at 360 yen to a US dollar. Why that number? 360 degrees in a circle, the rising Sun.

However, this system was doomed by a structural contradiction identified by Belgian-American economist Robert Triffin. Triffin recognized that to facilitate global trade and post-war reconstruction, the world needed US dollars to provide “liquidity.” It needed a currency to facilitate buying and selling. This required the US to “export” dollars to Europe and Asia. They needed to run constant trade deficits (buy stuff from other countries), increase foreign aid, and build military bases to avoid dollar shortages.[3]

However, the more dollars the US printed and exported, the less trust the world had that the US actually held enough gold to back them. Bretton Woods contained the promise that US dollars could be traded for gold at that price. In December 1958, Europeans made their currencies convertible, including for the US dollar, for international transactions. This move dramatically increased the US Treasury’s demand for gold.

The “Triffin Dilemma” exposed the following contrast of values:

If the US stopped printing and exporting dollars, the global economy would suffocate (liquidity shortage).

If the US kept printing dollars, the gold peg could collapse if other countries tried to redeem them for gold (a confidence crisis).

On February 4th, 1964, President Charles de Gaulle of France made a historic statement about the US dollar during a press conference at the Élysée Palace. He criticized the US dollar’s special status as the world’s dominant currency, which his Finance Minister, Valéry Giscard d’Estaing, called “exorbitant privilege.” He began sending ships to the US with their dollar holdings (many of which were siphoned from the growing US military involvement in Vietnam, which had previously been a French colony). Germany and Spain did the same, slowly draining the gold from Fort Knox over the next few years.

Phase 2: The Shadow Rise of the Eurodollar

While Bretton Woods governed official channels, a shadow system emerged in the 1950s, the Eurodollar. These were simply US dollar deposits held in banks outside the United States (primarily London), and thus initially outside the jurisdiction of the Federal Reserve. It began mainly with the Soviet Union and China, who wanted to hold dollars for trade but feared US seizure.[4]

It expanded with the “petro-dollar” during the oil crisis, when oil prices quadrupled and surpluses needed to be invested worldwide. The spread of Eurodollar created the “Third World Debt Crisis, which Reagan used to mobilize the IMF to pressure debtors to open up their economies, and Clinton/Gore used to internationalize the Internet.

This technology produced the globalized proto-digital dollar. It became system of electronic spreadsheets and pure information transfer that bypassed the physical constraints of the dollar and its connection to the Bretton Woods gold peg. It has continued to grow as demand for USD increased, but slowly brought back under the observations of the US Federal Reserve and SOFR (Secured Overnight Financing Rate). The big question: Will it survive the USD stablecoin?

Phase 3: The Nixon Shock and the “Information Standard” (1971–1980)

By the late 1960s, the Triffin Dilemma had reached its breaking point. Foreign nations were demanding gold for their surplus dollars, and the US gold vaults were bleeding dry.

On August 15, 1971, President Richard Nixon went on national TV and announced he was temporarily suspending the convertibility of the dollar into gold (which was revalued to $42 per oz). The “Nixon Shock” ended the Bretton Woods system. The dollar became fiat. US Treasury William Connelly in the Nixon administration famously gaffed, “The dollar is our currency, but it’s your problem.” to the G-10 room of European finance ministers.

To stabilize this unmoored system, the US relied on the coordination of the G-5 nations (US, UK, France, Germany, Japan) to manage exchange rates, but ultimately allowed them to “float.” At the same time, Reuters Money Monitor Rates went online and became the de facto virtual market for global currencies. Banks paid a subscription to view currency prices, and banks paid to have their prices listed. Traders got on a phone or two, to negotiate a FX transaction. It was a relatively simple setup at first, but built on Reuters’ long history of providing financial news over telegraph and other media.

It was aided by the volatility of the Arab-Israeli War, the depreciation of the USD, and rising oil prices that were now priced in US dollars. Going off gold meant a devaluation of gold, and the oil-producing countries (OPEC) were not happy. Prices quickly quadrupled from $3 to $12 a barrel. The Ford administration worked out a deal with Saudi Arabia. The Saudis would price all oil sales in USD, and the US would provide military protection in the volatile Middle East. They also agreed to hold large amounts of US Treasuries with the proceeds from their oil sales.

While Bretton Woods governed official channels, a shadow system emerged in the 1950s, the Eurodollar. These were simply US dollar deposits held in banks outside the United States (primarily London), and thus outside the jurisdiction of the Federal Reserve. It began mainly with the Soviet Union and China, who wanted to hold dollars for trade but feared US seizure.

European banks began lending these deposits in USD. They used LIBOR, a survey of London banks’ recommended interest rates, to target interest rates. This market exploded in the 1960s, fueled by multinational corporations. It was a network of “ledger money” transacted not by physical transport, but by telegraph and telex. The telex machine allowed a bank in London to transfer ownership of dollars to a bank in Tokyo instantly via coded messages. This technology produced the proto-digital dollar. It was a system of pure information transfer that bypassed the physical constraints of the dollar and its connection to the Bretton Woods gold peg.

Chairman of Citibank and financial visionary Walter Wriston (ATMS, CDs) famously declared that the gold standard had been replaced by the “information standard.” He argued that in a world of telex and satellite instant communication, the value of currency was no longer determined by bullion, but by the information available about the issuing country’s economic health. The market’s judgment, processed through telecommunications, became the new economic discipline. Capital would go where it was well treated.[5]

Phase 4: Reagan, Regan, and the Collateralization of Debt (1981–2008)

In the 1980s, the Eurodollar found a new anchor: US government debt. Under President Ronald Reagan and his Treasury Secretary (and former Merrill Lynch CEO) Donald Regan, the US drove massive budget deficits through tax cuts and military spending. In conventional economics, this was reckless. In the logic of the global dollar, it was structural brilliance. By running deficits, the US pumped trillions of dollars of US Treasury bonds into the global financial system, facilitating the liquidity needed for the global trade that filled the coffers of China and Russia.

The ever-expanding Eurodollar market needed high-quality “prime collateral” to secure loans and derivatives. US Treasuries provided this. Trust was no longer based on gold; it was based on the depth and liquidity of the US Treasury market. US debt was the cheapest collateral used to borrow Eurodollars. You could use other collateral like corporate bonds, but would have to pay a more expensive “haircut,” an insurance policy against price volatility.

The Reagan administration began a process to computerize US Treasury operations, eliminating bearer bonds. This helped US export debt, and the world’s central banks eagerly bought it to use as the “safe asset” backing their own banking systems. Bank reserves shifted from gold to dollars and treasuries. The US deficit became the global economy’s savings account.

Phase 5: Shortages, Tension, and BRICS De-dollarization (2008–2024)

This debt-backed system maintained US dollar global hegemony. It provided a liquidity solution for the world, but it also created problems. Because the global economy relies on the dollar for trade (oil, commodities) and debt servicing, any tightening by the Federal Reserve creates increased global dollar demand and eventually shortages. Spreading dollars meant increased trade deficits, foreign direct investment (FDI), military bases, foreign aid, and Eurodollars.

Crises cause additional demand for US dollars. Global elites protect their wealth by buying USD and USD-denominated assets, the so-called “Milk Road.” This weaponized volatility led to Global South and the rise of the BRICS nations (Brazil, Russia, India, China, South Africa). They embraced the new term coined by Goldman Sachs economist Jim O’Neill in 2001 to describe the four emerging economies (South Africa joined later) that had grown tremendously with the spread of neoliberal-based trade, fiat dollars, and US Navy shipping providing international protection for commerce. They began pushing for de-dollarization.

China and Russia sought to escape from the sanction capabilities of the West, where the US could confiscate their reserves, cut them off from SWIFT (the successor to telex messaging), or set price levels for their oil sales.

They attempted to build alternative payment rails (CIPS, SPFS) and trade in local currencies (Yuan/Ruble) or gold-backed tokens. However, they lacked the deep, liquid collateral markets that the US Treasury provided.

Phase 6: The Genius Act and the Supercharged Dollar (2026–Future)

This brings us to the present transition. The Genius Act represents the US response to de-dollarization: not a retreat, but a technological offensive. By mandating that stablecoins be backed 1:1 by US Treasuries, the US creates a non-CBDC “sovereign digital dollar” that combines the characteristics of all previous eras:

Like the Eurodollar, it moves instantly on digital rails (blockchains), bypassing clunky correspondent banking.

Like the Reagan Era, it is backed by US debt, creating structural demand for Treasuries.

Unlike the BRICS alternatives, it offers “pristine” collateral and liquidity that the Yuan and any other BRICS currency cannot match.

The Genius Act weaponizes stablecoins to penetrate markets the traditional dollar couldn’t reach. It provides the Global South with digital dollars that are easier to use than local currency and safer than unregulated crypto. Instead of losing the world to de-dollarization, the Genius Act ensures the dollar’s “Information Standard” is upgraded to Spreadsheet Capitalism’s “Programmable Standard,” re-anchoring the global economy to the US Treasury.

From 2027 onward, every time the Federal Reserve’s FOMC changes the fed funds rate, hundreds of millions of people outside the United States who hold USDC, USDT (compliant version), or similar stablecoin tokens will feel it immediately in their phone wallets. The Fed will have the same tools it always had — but now those tools control a much larger, truly global dollar system that lives on blockchains and reaches places traditional banking never could. The GENIUS Act doesn’t give the Fed new powers; it magnifies their old powers on a planetary, real-time reach. The Fed once again becomes the global lender of last resort, this time for global digital dollars.

Phase 7: AI, USD, and Emerging Multicurrency Regimes (2028-Future)

Historically, alternative currency blocs struggled due to liquidity fragmentation, complex FX risk management, costly compliance overhead, and information asymmetry between participants. AI dramatically reduces these frictions by automating FX clearing and pricing, cross-border AML (Anti-Money Laundering) and KYC (Know Your Customer) (KYC/AML), trade documentation analysis, and risk assessment for invoicing in local currencies. It lowers the operational barriers to non-USD settlement networks (e.g., CNY, INR, AED, EUR multicurrency corridors).

AI-driven “autonomous financial agents” dynamically choose settlement currencies based on fees, liquidity, and regulatory risk, as well as execute multicurrency arbitrage or hedging in real time. It can also route payments across emerging Central Bank Digital Currencies (CBDC) networks.

A world of AI-mediated multicurrency routing resembles packet-switched networks in telecom, where the “best path” may not always run through USD but routes around it. Currency choice becomes computational rather than political. This fluency pushes the system toward algorithmic polycentrism.[6]

Countries developing national AI infosystems (China, UAE, Singapore, India) can use AI to improve risk underwriting and enable more trade in local currency. Countries deploy AI-enhanced capital controls and efficiently supervise financial institutions, creating alternative compliance regimes that are not necessarily reliant on Western standards. This technological transition reduces dependence on USD-centric regulatory infrastructures.

For countries trading energy, minerals, and food, AI enables predictive logistics and supply chain optimization, automated escrow and settlement systems, smart-contract invoicing in multiple currencies, and automated FX hedging. These innovations make it easier for commodity exporters (Saudi Arabia, Brazil, Russia) to price and settle trades in non-USD currencies without significant operational risk.

AI acts as a risk-mitigation technology, making de-dollarization more feasible. AI does not eliminate the dollar’s strengths, such as liquidity, deep bond markets, the rule of law, and global payment rails tied to US infrastructure. But AI does erode the dollar’s exclusivity.

Global finance is shifting from monocentric (USD) to a multiplex system with multiple currencies routed algorithmically. The USD remains the backbone, but not the only spine. Currencies are increasingly driven by algorithmic trading models, sentiment classification, real-time monitoring of commodity flows, and predictive macro models. This makes FX potentially more volatile but also more dynamically optimized.

Multicurrency systems become computationally manageable, reducing the bias toward a single dominant currency. AI fosters a struggle between state-based monetary sovereignty (central banks, CBDCs) and platform-based private monetary infrastructures (stablecoins, platform credit systems, AI liquidity brokers). The USD system may face challenges from private networks (such as USDC and PayPal’s PYUSD) operating atop AI-based payment routing. Yet these mostly reinforce US monetary power because they remain dollar-denominated.

AI turns currency competition into a real-time, highly automated strategic contest. Instead of slow diplomatic or macroeconomic adjustments, currency pressures can be amplified and executed by autonomous agents that route payments, reprice collateral, trigger liquidations, and exploit latency arbitrage across networks and tokenized markets. The result: faster, more profound, and more systemic shocks to liquidity and prices.

Conclusion

The history of the US Dollar is not a story of static dominance, but of ruthless technological adaptation. The US successfully maintained its hegemony of liquidity by shifting the substrate of its currency from Gold to Information and to Code (Stablecoins/AI).

The “Genius Act” represents the culmination of the USD policy and technological trajectory. By fusing the liquidity of the Eurodollar with the solidity of US Treasuries on a blockchain, the US is attempting to resolve the Triffin Dilemma through stablecoin technology. It allows the US to export liquidity without losing control (via programmable compliance).

However, the impending AI era introduces a wild card. As money becomes purely computational, the “exorbitant privilege” of the US may be challenged not by rival states, but by rival algorithms that route value around the US STAC stack. The future battle for the global economy will not be fought over interest rates, but over the architecture of the network itself.

Notes

[1] The G-10 consisted of governments of eight International Monetary Fund (IMF) members—Belgium, Canada, France, Italy, Japan, the Netherlands, the United Kingdom, and the United States—and the central banks Germany and Sweden. This group was, by default, in charge of maintaining the economic growth and stability of international currencies. Although in effect, its powers are limited, it still presented an important image of national sovereignty.
[2] This research project started with my MA thesis on the deregulation of finance and telecommunications in the post-Bretton Woods era. Thesis: The Message is Money: Deregulation and the Telecommunications Structure of Transnational Financial Industries.(1986)PhD Dissertation: Symbolic Economies and the Politics of Global Cyberspaces. (1993)
[3] Moffit, M. (1983) The World’s Money: International Banking from Bretton Woods to the Brink of Insolvency. NY: Simon & Schuster. This is a classic on monetary events leading up to the Nixon devaluation.
[4] Moffit, M. (1983) The World’s Money: International Banking from Bretton Woods to the Brink of Insolvency. NY: Simon & Schuster.
[5] Wriston, W. (1992) The Twilight of Sovereignty: How the Information Revolution is Changing our World. (New York: Charles Scribner’s Sons).
[6] Tyson, K. (2023) Multicurrency Mercantilism: The New International Monetary Order. Independently published. ISBN 9798864645031.
[7] Initial Gemini Prompt: Provide a historical overview of the globalized US dollar. Please start with the USD-gold standard established at the Bretton Woods conference and how the Triffin Dilemma challenged it. Explain how Nixon stopped the convertibility of the dollar and gold. Be sure to mention the shadow USD, which came to be known as the Eurodollar, and how it was transacted by telegraph and telex. With Nixon’s decision, the USD became fiat, anchored only by the G-5 nations and by what Walter Wriston called the “Information Standard.” Soon, Reagan and Regan organized the dollar and Eurodollar around national debt. They grew the US deficit to produce US Treasuries that would serve as prime collateral for eurodollar borrowing, providing trust among transacting financial institutions worldwide. The USD continued as the world’s primary transacting and reserve currency. Still, shortages heightened international tensions, leading to debates about “de-dollarization” among the BRICS countries, dominated by China and Russia. Finally, explain how stablecoins, weaponized by the Genius Act, will supercharge the global USD and AI will bring into effect new multi-currency regimes.

References

Dordick, H.S., and Neubauer, D. (1985) “Information as Currency:
Organizational Restructuring under the Impact of the Information
Revolution.” Keio Review, No. 25.
Eichengreen, B. (1996) Globalizing Capital: A History of the International Monetary System. Princeton, NJ: Princeton University Press. I am indebted to his fifth chapter, “From Floating to Monetary Unification,” which contains a good overview of this process. Pages 136-141 were particularly useful.
Giddens, A. (1983) The Nation-State and Violence. (Berkeley, CA:
University of California Press).
Goux, J. (1990) Symbolic Economies. (Ithaca: Cornell University Press).
Gowan, P. Global Gamble: Washington’s Faustian Bid for World Dominance. London: Verso.
Greider, W. (1987) Secrets of the Temple. How the Federal Reserve Runs the Country. New York: Simon and Schuster. pp. 337-338. A very extensive treatise on the economic conditions of the 1970s.
Harvey, D. (1989) The Condition of Postmodernity. (Oxford: Basil
Blackwell, Ltd).
Levy, S. (1989) “A Spreadsheet Way of Knowledge,” in Computers in the
Human Context: Information Technology, Productivity, and People.
Tom Forester (ed.) (Oxford: Basil Blackwell).
Roberts, John (1995) $1000 Billion a Day: Inside Foreign Exchange Markets. London: Harper-Collins.
Shapiro, M. J. (1989) “Textualizing Global Politics,” In Der Derian, J. and Shapiro, M. J. (eds.) International/Intertextual Relations:
Postmodern Readings of World Politics. Issues in World Politics Series. (MA: Lexington Books: D.C. Heath and Company).
Smith, R. (1989) The Global Bankers. New York: Truman Talley Books/ Plume.
Strange, S. (1997) Mad Money: When Markets Outgrow Governments. Ann Arbor: University of Michigan Press.
Tehranian, M. (1990) Technologies of Power: Information Machines and
Democratic Prospects. (NJ: Ablex Publishing Company).
Tyson, K. (2023) Multicurrency Mercantilism: The New International Monetary Order. Independently published. ISBN 9798864645031.
Wachtel, H. (1986) The Money Mandarins. NY: Pantheon Books.
Wriston, W. (1992) The Twilight of Sovereignty: How the Information
Revolution is Changing our World. (New York: Charles Scribner’s Sons).

Not to be considered financial advice.

Anthony J. Pennings, PhD is a Professor at the Department of Technology and Society, State University of New York, Korea and a Research Professor for Stony Brook University. He teaches AI and broadband policy. From 2002-2012 he taught digital economics and information systems management at New York University. He also taught in the Digital Media MBA at St. Edwards University in Austin, Texas, where he lives when not in Korea.

Category: artificial intelligence, blockchain, crisis communications, cryptocurrencies
Tags: algorithmic trading models > Bretton Woods Conference > eurodollars > Fort Knox > gold standard > Stablecoins > US Treasuries > USD

The Genius Act, USD-backed Stablecoins, and the Death of the Eurodollar

Posted on | November 23, 2025 | No Comments

Recommended Citation APA (7th Edition)

Pennings, A.J. (2025, Nov 23) The Genius Act, USD-backed Stablecoins, and the Death of the Eurodollar. apennings.com https://apennings.com/data-analytics-and-meaning/the-genius-act-usd-backed-stablecoins-and-the-death-of-the-eurodollar/

Introduction

With the passage of the US Genius Act of 2025, the era of “wildcat” crypto experimentation is over.[1] In its place rises a state-sanctioned, gridmatic architecture that fundamentally alters the plumbing of the global economy. By mandating that all US-compliant stablecoins be backed 1-to-1 by short-term US Treasury securities, the Act has transformed the humble stablecoin from a casino chip for crypto-speculation into the primary vector of US monetary sovereignty and hegemony.

This innovation is the ultimate realization of the Semiotic-Abstraction-Computation-Telecom (SACT) stack analysis of spreadsheet capitalism that I have been developing.[2] If the Excel spreadsheet privatizes corporate and government value, the “Genius-compliant” stablecoin nationalizes global liquidity. It is a technology that does not just represent the dollar but weaponizes it, challenging and ultimately replacing the Eurodollar system that has governed global finance since the 1950s.

Introduced on May 1, 2025, by Sen. Bill Hagerty [R-TN], a former hedge fund co-founder and Ambassador to Japan during the first Trump administration, the US Genius Act envisages stablecoins as a technological upgrade to the USD, and it’s shadow variant, the Eurodollar. The law, which stands for Guiding and Establishing National Innovation for US Stablecoins Act, requires stablecoin issuers to back their digital assets with corresponding assets and comply with standards for capital, liquidity, transparency, and risk management. Instead of viewing stablecoins as a threat to the dollar, the Act allows the US to export its currency more efficiently than ever before, while locking the issuers and purchasers into financing the US national debt.[3]

In the context of my SACT framework, they function as a pure semiotic Substitution (S-Layer) vehicle, as exemplified in this USD example.

Signifier – The digital token (e.g., USDC, USDT).
Signified – The US Dollar held in a bank vault (or Treasury bill).
The Promise – The substitution is 1:1 and reversible at any time.

The Semiotic Shift: From Bank Promises to Sovereign Tokens

To understand the magnitude of this shift, we must look at the Substitution (S) layer of our stack.

For 70 years, the world ran on Eurodollars. A Eurodollar was a semiotic signifier that stood for “a US dollar held in a bank outside the US.” Crucially, this was credit money. It was a liability of a private bank (like HSBC or Barclays) backed by deposits but with no reserve ratio. When the world needed liquidity, these offshore banks “printed” it by extending credit on their spreadsheets.

The Genius Act destroys this logic. A Genius-compliant stablecoin (like the new “Clean” USDC) is not a bank liability. It is a tokenized claim on US Sovereign Debt.

By forcing stablecoin issuers to hold US Treasuries, the Act creates a massive liquidity vacuum. Capital is now fleeing the risky, fractional-reserve balance sheets of offshore Eurodollar banks and flowing into the full-reserve, “risk-free” vaults of US stablecoin issuers.

Old Semiosis: Dollar = Private Bank Promise (Credit)

New Semiosis: Dollar = US Treasury Bill (Equity of the State)

The result is the defunding of the global banking system to finance the US government. The “offshore” world is no longer a place where money is created (credit); it is a place where US government debt is distributed (collateral).

The Abstraction Layer: The Bifurcation of Value and the “Pristine” Dollar

In the Abstraction (A) layer, the Genius Act creates a new, ruthless hierarchy of value. We are witnessing a bifurcation of the global currency supply into “Clean” and “Dirty” dollars.

“Clean” dollars are Genius-compliant tokens. These are programmable, KYC-compliant, and backed by the full faith and credit of the US Treasury. Because they act as “pristine collateral” in the new Cloud-Spreadsheet Capitalism stack, they trade at a structural premium.

“Dirty” dollars are legacy offshore deposits and non-compliant algorithmic stablecoins. These are viewed as “sub-prime” money, trading at a discount due to regulatory risk and lack of direct Treasury access.

This distinction will likely drive the price of the US dollar upward. As the Global South and international corporations scramble to access “Clean” dollars for trade settlement, demand for the underlying asset (US Treasuries) skyrockets. The Genius Act effectively turns the US dollar into a global membership fee for the digital economy.

The Telecom Layer: Weaponized Diffusion in the Global South

It is in the Telecommunications (T) layer where the geopolitical consequences are most acute. The Genius Act does not just export currency; it exports a new monetary operating system. In the Global South, the diffusion of these Genius-compliant stablecoins is replacing local currencies not just for transactions, but as the primary store of wealth.

Consider the following transaction: A merchant in Nigeria no longer needs SWIFT or a correspondent bank to pay a supplier in Vietnam. They use a Genius-coin rail that settles instantly. The “T” layer friction is gone, but so is the local central bank’s visibility into the trade.

Regarding wealth, by holding a Genius-coin on a smartphone, a citizen in Argentina or Turkey is effectively holding a US Treasury bond. They are bypassing their domestic banking system entirely to lend directly to the US government.

This change creates a form of “Hyper-Dollarization” that challenges national bank systems. It strips developing nations of their monetary sovereignty. Their central banks can no longer manage their money supply because their citizens operate on a parallel, superior grid governed by US code and backed by US debt.

Conclusion: The Spreadsheet Becomes the Sovereign

The Genius Act proves that stablecoins are not a deviation from spreadsheet capitalism; they are its apotheosis. They complete the transition of the dollar from a passive store of value to an active, computational object. This object is:

Written (Substitution) as a tokenized Treasury bill.

Abstracted (Abstraction) as a “Clean,” premium asset.

Computed (Computation) via smart contracts that enforce US sanctions and tax compliance.

Synchronized (Telecommunications) across a global cloud that renders local borders irrelevant.

We have moved from the “gridmatic” governance of the corporation to the “chainmatic” governance of the planet. The US government has effectively “IPO’d” the dollar on the blockchain, turning every stablecoin wallet in the world into a brokerage account for American power. The Eurodollar is dead; long live the Sovereign Spreadsheet.

Notes

[1] Hockett, Robert C., “Money’s Past is Fintech’s Future: Wildcat Crypto, the Digital Dollar, and Citizen Central Banking,” 2 Stanford
Journal of Blockchain Law & Policy (2019)
[2] Pennings, A.J. (2025, July 24) Stablecoins, Blockchains, and the Semiotic-Telecom-Computational Stack of Spreadsheet Capitalism. apennings.com https://apennings.com/artificial-intelligence/stablecoins-blockchains-and-the-semiotic-telecom-computational-stack-of-spreadsheet-capitalism/
[3] Issuers of stablecoins are required to buy US treasuries. They can hold these securities and collect the fixed interest payments. As well as some fees. Additional information on Genious Act regulations are available.

Not to be considered financial advice.

Anthony J. Pennings, PhD is a Professor at the Department of Technology and Society, State University of New York, Korea and a Research Professor for Stony Brook University. He teaches AI and broadband policy. From 2002-2012 he taught digital economics and information systems management at New York University. He also taught in the Digital Media MBA at St. Edwards University in Austin, Texas, where he lives when not in Korea.

Category: artificial intelligence, blockchain, cryptocurrencies, data analytics and meaning
Tags: Stablecoins > US Genius Act > US Genius Act of 2025

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About Me

Professor (full) at State University of New York (SUNY) Korea since 2016. Research Professor for Stony Brook University. Moved to Austin, Texas in August 2012 to join the Digital Media Management program at St. Edwards University. Spent the previous decade on the faculty at New York University teaching and researching information systems, digital economics, and global political economy

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anthony.pennings@sunykorea.ac.kr

Anthony J. Pennings, PhD

WRITINGS ON AI POLICY, DIGITAL ECONOMICS, ENERGY STRATEGIES, AND GLOBAL E-COMMERCE

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The SACT Attack: How Spreadsheet Capitalism Conquered the World

Seven Phases of Global US Dollar Transformation: Past and Future

The Genius Act, USD-backed Stablecoins, and the Death of the Eurodollar

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