Will the dollar crash coincide with a huge trade surplus?

[Paul Or Nothing II]

[QUOTE=osan;4685051]This is almost certainly not goign to be the case because people on average are simply too ignorant and in many cases stoopid to understand the roots of the problem.

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No, they will not... save in minute minority. Most people have not the faintest understanding of what MONEY is. They only know cash and that it buys them lunch at Burger King. They do not know. They do not want to know. They want lunch in exchange for pieces of paper and to hell with the rest of it. If and when crisis REALLY comes, they will have no understanding and will remain uninterested. All they will care about is that their bellies remain full, their cars go, and their houses do not freeze in winter. That pretty well sums up the truth for at least 75%, and I'd put it a bit higher... perhaps 90%. The depth and breadth of the general ignorance is mind numbing, the same being said for the attitudes.

While I sympanthize with your despair with respect to ignorance of the masses, one must realize that there's an underlying selective market-process at work, which does NOT depend on each market-participant being wise & well-informed, it works with each individual making choices in his/her self-interest & that in itself is sufficient to ensure selection of optimum processes.

Afterall, gold (& silver) independently EVOLVED to become money over thousands of years, NOT because the masses of people back then were very smart & well-informed, hardly so, if anything, they were less educated & less informed than the masses now & yet, it was the market-process that ensured selection of gold & silver as the most popular forms of money.

It's only been 40 or so years since gold & silver have been detached from its monetary role globally, there's no doubt that they & may be other forms of sound money will find their way back through the market-process, once again, be it at the least as the phony gold-standard that Steven is talking about.
Markets can wander & waiver........for a little while....but they always self-correct.......bubbles occur.....again & again & again.....& they self-correct every time.......NOT because every market-participant participating in the process is wise & well-informed but because there are underlying evolutionary selective processes that are at work.

Now, if one believes that there are some all-powerful, multi-dimensional, lizard-like "elite", with an access to multi-verses & wormholes, & who can control markets & economic laws then recognizing & believing in market-process like Austrians do may be a little difficult but that's just the Austrian side of things.

[Madison320]

Obviously, I hope you're right, but I think you may be underestimating the amount of naivete and ignorance about money that there is left to exploit -- worldwide. Citizens will want gold and silver, but the vast population of sheeple who really haven't the faintest understanding of money, will just want the machines turned back on, and are FISH when it comes to buying into false scapegoats, and see no problem whatsoever with throwing gasoline onto a fire, as long as they get theirs.

I don't think you need to be sophisticated to understand that fiat currency sucks. All you have to do is find out your money won't buy anything. People aren't that dumb. They just get used to the status quo. Wait until their life savings evaporates overnight. Politicians who suggest another fiat currency after the crash might be taking their life in their hands.

[Madison320]

Maybe, maybe not. There is one thing that is fundamentally different today from all times past: technology in general and the computer in specific.

You may be talking about something completely different but this sort of reminds me of an argument that the US money supply is different from other, more primitive money supplies like Zimbabwe. The argument is that the US money supply can easily be contracted because it's all electronic. As opposed to the money supply in Zimbabwe where it's all printed on paper. I think the argument is wrong because the logic should be the same whether electronic or printed. The only way I see that you could shrink the money supply, even electronicaly is to REMOVE money from someone's bank account. I don't think that would go over too well!

I can't exactly explain why but I have a feeling the fact that banking is electronic may mean that the money supply is really HIGHER than we think. It would violate a basic economic rule that you can't get something for nothing if it was that easy to shrink the money supply. I don't see how you can run huge deficits, borrow and print like crazy and then when prices start rising just magically make the money supply shrink electronically.

[Madison320]

[QUOTE=Paul Or Nothing II;4685405]

This is almost certainly not goign to be the case because people on average are simply too ignorant and in many cases stoopid to understand the roots of the problem.



While I sympanthize with your despair with respect to ignorance of the masses, one must realize that there's an underlying selective market-process at work, which does NOT depend on each market-participant being wise & well-informed, it works with each individual making choices in his/her self-interest & that in itself is sufficient to ensure selection of optimum processes.

Afterall, gold (& silver) independently EVOLVED to become money over thousands of years, NOT because the masses of people back then were very smart & well-informed, hardly so, if anything, they were less educated & less informed than the masses now & yet, it was the market-process that ensured selection of gold & silver as the most popular forms of money.

It's only been 40 or so years since gold & silver have been detached from its monetary role globally, there's no doubt that they & may be other forms of sound money will find their way back through the market-process, once again, be it at the least as the phony gold-standard that Steven is talking about.
Markets can wander & waiver........for a little while....but they always self-correct.......bubbles occur.....again & again & again.....& they self-correct every time.......NOT because every market-participant participating in the process is wise & well-informed but because there are underlying evolutionary selective processes that are at work.

Now, if one believes that there are some all-powerful, multi-dimensional, lizard-like "elite", with an access to multi-verses & wormholes, & who can control markets & economic laws then recognizing & believing in market-process like Austrians do may be a little difficult but that's just the Austrian side of things.

I agree. You don't need to be Milton Friedman to realize the million dollars in your retirement account won't buy dinner at McDonalds. People will demand real money. This has happened many times before. Is there any precedent for a failed fiat currency being replaced with another fiat currency?