Wednesday, May 5, 2010

Paper Currency Preparing To Crater Worldwide

Fiat money doesn't work.


It's a fun ride as long you get off before the music stops. Woe onto those people who are living when the piper comes to collect his due. Fiat money always ends up in a huge, nightmarish crash that brings everyone down.

I guess some people are naturally drawn to boom-bust cycles and want to play drama queen. If there were no crisis they would simply invent one.

People who want stable and prosperous civilizations don't abandon metal standards for arbitrary paper systems. It's not something that sane people do.


Anonymous said...

But doesn't it make you happy?

The best thing about fiat currency is that it is a self-defeating system, and near impossible to sustain. A nation that inflates faster than its neighbours will find an outflow of foreign exchange and gold to it, until it is exposed as insolvent! Unless it fixes exchange rates, and then suddenly finds a shortage of foreign exchange anyway!

The only way you can make fiat currency work is to create a World Reserve Bank, and make everybody agree to inflate at the same rate. Like that will ever happen.

Anonymous said...

Metal currencies (gold being the primary choice for most advocates of this) don't have a history of stability either. The goldsmiths and their kind through the ages have always liked such systems because through this limited resource they manipulated the markets and could control economies.

By going with such a system you are handing a few the control of your currency and economy and weakening the leadership (and honesty) of your nation or community.

These gold and money manipulating people are the wicked and selfish that care for no God or community, only worshipping gold and money and the accumulation of both. It is these evil people that are driving the economy (and quite likely the world with it) to its terrible ruin.

Texas Arcane said...

This is exactly the reasoning behind global government.

The 120 IQ crowd think, when all standards are completely arbitrary and we can isolate the entire planet inside a bolshevist fantasy sensory deprivation tank, we will be able to say money is worth whatever we state it to be and nobody anywhere will have a frame of reference to compare it with.

Except it won't work. Local economies will invariably devolve back to barter with things that have intrinsic guarantees of value, like metal backed securities and currencies. As inflation climbed it would never match demands for living standards through central fiat and people's living standards would spiral down.

Murray Rothbard wrote some great essays on this theme.

Texas Arcane said...

11:30 am

Except goldsmiths don't control the issuance of gold and it is impossible to monopolize. As a universal standard it cannot be topped as a secure backing for money.

Gold backed economies have their ups and downs and they are the tiniest fraction of the wild boom-busts that fiat money creates, often leading to mad wars and collapses of nations.

Of course, man is not a learning animal. It usually takes two generations of peace for mankind to forget any and all lessons of the past. We're into our fourth generation of peace now. Total lunacy and schizophrenia worldwide, natch.

Anonymous said...

Tex, I agree.
I remember reading (maybe 2 years ago)about blacks in Zimbabwe out panning for gold in order to get gold flakes to buy bread with.

They can't control all of us,everywhere,all the time.
I hope it holds another 5 weeks
for Rowan but damn,I want it to crash because it's so corrupt.Maybe this time we will rebuild better.
Not like last time,
and the time before that,
and the time before that...
Chris from Sydney

Anonymous said...

By going with such a system you are handing a few the control of your currency and economy and weakening the leadership (and honesty) of your nation or community.
-end quote.

I'll be up front here, I'm not laughing with you. leadership and honesty are terms not needed in finance hence politics, they are outdated and unnecessary impediments to those who seek to rule. Gold and precious metals as currency have limits in supply whereas paper has not, they will again be a portable store of value, as will barter. It may take the collapse of a global currency to bring this about but it's inevitable.

The parasite load has killed the host.

Anonymous said...

There seems to be no alternative but to return to a bi-metal monetary system, i.e. silver & gold. At present humans cannot be trusted with a decree, i.e. fiat.
The value in a bi-metal or even tri-metal system must be by weight and rarity for the reason that humans cannot be trusted at present. Maybe in future generations man's word may once again be given value, but for now man's word is valueless, therefore a standard weight must be established that cannot be counterfeited, silver, gold, would serve this purpose as their weight is uniform and cannot be counterfeited.