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Thread: Will the dollar crash coincide with a huge trade surplus?

  1. #31

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    Quote Originally Posted by Zippyjuan View Post
    Britain didn't join the Euro and the Pound is still in use so they did not have any "drop dead" date beyond which the currency would have no value.
    Corrected. I meant to say Irish Pound, but it's irrelevant, so I left that part out altogether in the correction.



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  3. #32

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    Quote Originally Posted by Steven Douglas View Post
    The US government, through the Treasury and Fed, could still create a new fiat currency, virtually overnight, with a fixed exchange value (with or without a drop dead date) for convertibility from one fiat currency to another. The Fed could call this new worthless fiat paper EAGLES, on the spurious claim that they are "backed" by gold, even though they are not convertible into gold.
    I don't think that will work because nobody will accept the new currency. I think we are headed for a global fiat currency crisis and so many people are going to get burned that no one will accept paper.

    I think it's going to be an interesting tug of war. Governments want to use fiat currency on their citizens. Citizens will want gold. Governments dealing with other governments will want gold. I just think the fiat backlash will be so great that gold will win.

  4. #33

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    Quote Originally Posted by Madison320 View Post
    I don't think that will work because nobody will accept the new currency. I think we are headed for a global fiat currency crisis and so many people are going to get burned that no one will accept paper.

    I think it's going to be an interesting tug of war. Governments want to use fiat currency on their citizens. Citizens will want gold. Governments dealing with other governments will want gold. I just think the fiat backlash will be so great that gold will win.
    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.

    1) Vilify someone else for what is happening to the dollar.
    2) Sell everyone on the change as being a major step toward protecting their currency, even using "gold backing" as a confidence booster.
    3) Don't actually back it by gold. Just say that it is now backed by gold, and get the Keynesians and academics in general to confirm this with lengthy and complex reports, and utter conviction that the currency change will save the economy and protect everyone in the process.

    I wish that people would no longer trust in paper, but this isn't 1933, with a population that was accustomed to hard specie alternatives. Roosevelt had to go through great lengths just to assure people that the dollar was "not a fiat currency", because hard money advocates were everywhere, and it was talked about constantly. No more. Those days are gone. Nobody in recent generations knows anything but fiat paper as money, the word "fiat money" doesn't scare anyone, and most can't even conceive why hard specie would be more desirable. Hard specie trusters were VILIFIED as the problem, as they were characterized by Roosevelt as "unfashionable" hoarders. Like preachers who rape their congregations, then tell them that their problem is their lack of faith, anyone who "causes a loss of confidence" in the fiat currency will be vilified -- as if the monetary policy itself did not assure that ultimate lack of confidence anyway, by design.

    Oh, and the distrust of paper: That opens the door for alternatives: Like going to a "paperless" economy, as a "measure of protection" against whatever is vilified. Meanwhile, regardless of any distrust of paper, any medium of exchange that is in wider circulation, however weak, will trump barter every time.

    What I am hoping, more than anything else, is for states, like Utah, to take advantage of the chaos and make themselves isolated exceptions to the rule. If that happens, it could be the Good Camel's nose in the Fed's tent -- economies where people can flock for refuge.
    Last edited by Steven Douglas; 10-13-2012 at 06:47 PM.

  5. #34

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    Quote Originally Posted by Steven Douglas View Post
    1) Vilify someone else for what is happening to the dollar.
    That's something I hadn't thought of, but see it happening.
    Quiz: Test Your "Income" Tax IQ!

    The Income Tax Is An Excise, And Excise Taxes Are Privilege Taxes

    The Federalist Papers, No. 15:

    Except as to the rule of apportionment, the United States have an indefinite discretion to make requisitions for men and money; but they have no authority to raise either by regulations extending to the individual citizens of America.

  6. #35

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    THE SOLUTION IS BIODEGRADABLE TOO: From now on, print USD fiat money on rice paper purchased from China.

  7. #36
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    Quote Originally Posted by Madison320 View Post
    I think you're over complicating it. Printing money and debt have always been the path of least resistance for a democracy. The "elites" that you mention can't stop the laws of economics once too much money has been printed and too much debt accumulated.
    Maybe, maybe not. There is one thing that is fundamentally different today from all times past: technology in general and the computer in specific.

    In the bad old days when the manipulators got to doing their things, those things got out of hand for any of a fair number of reasons. These days, computer systems can monitor, correlate, and apply all manner of heuristic tricks to head off behaviors and results it does not want. I would warn anyone against underestimating the capabilities of these systems. The statistical modeling alone that I have seen in action is utterly staggering in its abilities to predict what will happen. I have worked on weapons systems that, were I to break my oath of silence and tell you about the capabilities, you would call me a liar due to your inability to accept what I said. The computer technologies of the power mongers is simply mind boggling to contemplate.

    Consider that the Pentagon alone has had a huge and unpublished "black budget" for decades. That money is unknown in its volume and is completely unaccounted for in terms of what it has purchased. It would be grossly naive to choose the belief that much money has not been invested in technologies that have direct bearings upon things such as national and global economies as these entities most certainly play heavily in the world of political power, whether in terms of direct exercise of tyranny or that of legitimate national security. Just consider that into which China has vested itself so heavily along such lines.

    In my somewhat qualified opinion as a person formally trained in economics, I do believe that with sufficient cybernetic power behind you, it is possible to predict how far one can go in terms of printing "excess" currency before the economy begins to run away from your control. I believe it is eminently possible to do this while specifying various behavioral parameters - for example, the Fed gives out all this cash to various financial institutions on a set of conditions that is not the be violated under any circumstance whatsoever. Done. The economy thusly remains stable in the sense that those pulling the strings are still able to make it go this way or that.

    This is by no means far-fetched and in fact is eminently plausible and IMO even likely to be the case. Virtually every indicator conceivable can now be monitored either directly or through statistical derivation. This huge body of observations can be reduced to a set of point variables or factors and predictive models generated from them. This is a colossally complex task, but "they" have had decades in which to work on the pieces and pull them all together. The thought that such systems do not exist seems utterly implausible to me. Only idiots would ignore such avenues of research and I do not think we are being corralled by stupid people. They may be many things including profoundly psychotic, but stupid is not among the characteristics.

    As for over-complication - I do not see that as being the case at all. The process of cultivating power, in this case power as embodied by economic capital, is largely a zero-sum game in the eyes of those engaged in such cultivation. That means they must steal what they want from others because legitimate and honest exchanges result only in orthogonal movement. I exchange X for Y for no net gain or loss in terms of power. That does not satisfy these sorts of people. They want to take what is yours, hopefully with your consent, but if not then through trickery. Such trickery on the scales we now witness requires fantastically complex means of execution; of this there can be no valid contravening argument. Suck most of the global value from the hands of the vulgar and deposit it into ours without precipitating world-wide rebellion... no mean feat, that.

    100 years ago the sorts of manipulations we now witness would have been barely conceivable, much less considered plausible by the people of that time. Much has changed in that short span and it appears to me that the thinking of the common man has not quite kept up in terms of understanding what is possible now v. what is not.

    http://dailyreckoning.com/fiat-currency/

    http://www.caseyresearch.com/editori...worth-one-word[/QUOTE]
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    ignominia et contemptum tyrannis

    Habeo excelsum artem; afflixerim cum crudelitate illis qui laedas me

    Shelley's thinly veiled warning to tyrants:

    The monster saw my determination in my face and gnashed his teeth in the impotence of anger. "Shall each man," cried he, "find a wife for his bosom, and each beast have his mate, and I be alone? I had feelings of affection, and they were requited by detestation and scorn. Man! You may hate, but beware! Your hours will pass in dread and misery, and soon the bolt will fall which must ravish from you your happiness forever. Are you to be happy while I grovel in the intensity of my wretchedness? You can blast my other passions, but revenge remains--revenge, henceforth dearer than light or food! I may die, but first you, my tyrant and tormentor, shall curse the sun that gazes on your misery. Beware, for I am fearless and therefore powerful. I will watch with the wiliness of a snake, that I may sting with its venom. Man, you shall repent of the injuries you inflict.

  8. #37
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    Quote Originally Posted by Steven Douglas View Post
    I think it's the difference between reorganization and outright bankruptcy.
    Methinks you are right.

    One overriding M.O. in the process of 'saving' any large currency from an all-out crash is to simply create a new fiat currency, whereby every existing currency holder is forced to take a haircut; forced to sell their existing currency at a fraction of its value, real or nominal.
    That has been the case in the past, but I am asserting that this may not be necessary. The other edge of the technology sword is the retention of all this historical data that anyone can access. This makes it far easier for people to discover the trickery and this constitutes exposure for those being tricky. They may not give a damn... but if they do, then why take a path fraught with the risk of discovery when one can retain that which is familiar and the manipulation of which is far less likely to present convincing evidence of perfidy? As things stand currently, any deterioration in the status of individual wealth can be very safely attributed to some standard boogey men, resulting in the controlled redirection of public ire. Whereas, establishing a new currency may constitute too transparent a scheme of legitimized robbery. In the former case, the resulting strike of relatively crushing poverty yields a circumstance where people "unite" - social order is maintained and the people become pliable with respect to ideas for a new economic order within the existing scheme which is familiar and therefore comfortable for the average mind. In the latter, the blow to personal wealth may be attributed to the new scheme... just another grand fuck up by "them". If conditions deteriorate enough, people may choose an inconvenient target for their displeasure and act on it beyond the normal channels of control. That presents a very broad and high face of exposure and if general rioting and insurrection, indicating a retreat from consent to be governed, is not desired then I see no clearly outstanding reason the elite would want to assume such risk.

    We saw this with the Euro. European fiat currencies joining the Euro had to be converted into Euros by a drop-dead date, beyond which they were worthless. The drop-dead date from gold and silver certificates, and other notes said to be backed directly by gold and silver, was just an act of legislation (or worse yet, an executive order) with no notice given and no other currency to turn to for refuge. Even with the "Dollar", however, was a case of one type of currency being converted to another, with every currency holder forced to take a loss. Our counterfeiters-in-charge have managed this coup in phases, so that the same basic UNIT never changed -- only what that unit represented. But they could have changed the name in the process, and still can.
    Exactly why I would think the adoption of a new currency would be an unattractive option here. It is too obvious a strong-arm and what people will do is make a run on the commodities markets in order to escape the sinking ship. Gold, silver, and so forth would go through the roof, but those in earliest would fare relatively well. If the elite want to avoid significant numbers of people doing this, they can simply let price inflation, coupled with wage deflation proceed "organically" and most people would simply go along for the ride because the fundamental framework of their daily realities will not have changed. The normalcy bias would do its job much to the advantage of those in control. No burning cities; just a nation full of resigned people accepting their fates as unavoidable as the elites rake in the percentages.

    The US government, through the Treasury and Fed, could still create a new fiat currency, virtually overnight, with a fixed exchange value (with or without a drop dead date) for convertibility from one fiat currency to another. The Fed could call this new worthless fiat paper EAGLES, on the spurious claim that they are "backed" by gold, even though they are not convertible into gold.
    Yes, but to what advantage? The dissolution of the sense of normalcy I think would be a waste of a great psychological advantage. The system as it stands could be far more safely effective than anything new. IMO.

    One of the biggest of the many lies unloaded onto us is in trying to say that any irredeemable fiat currency is "backed" by something, simply because it can be exchanged for something. For example, many say that the dollar that was once backed by gold went to being a "petrodollar" that was backed by oil instead, once an agreement was reached with oil producing nations. BULLSHIT. If the dollar was truly "backed" by oil, it would be denominated in a fixed quantity of oil. That was never the case. No currency can be said to be BACKED by anything that it floats against in exchange value.
    Exactly correct. But of course people do not see this because their edumacations have been so abominably poor.

    In an emergency (e.g., WWIII breaks out, and normalcy in international trade is shut down anyway) the US government could pull a China, as they restrict the circulation of EAGLE notes abroad, and limit the number of EAGLE NOTES that can even be exported or owned by non-ally foreigners, the way China has done with its RMB all along. Now you really have bankrupted the dollar for most of the world, albeit selectively. Who takes the haircut? Anyone who is not fer us is agin us.
    Now THIS I must say is a brilliant analytical gem. I had not considered the broader picture of foreign holders of US currency. This aspect renders a new currency scheme eminently logical and obvious. I was looking at this solely as an issue of destroying the American people, but the global aspect of this more general strategy is very compelling; almost conclusively so. This would be a truly brilliant strategic move, though it COULD precipitate war of some large and relatively powerful nation were to take grave exception to such transparent chicanery. That is the downside to this idea.

    With a fixed rate of exchange initially effect, a distorted mutation of Thier's Law takes over, as "the bad" Fed Dollars are driven completely out of circulation. Now you're forced to accept Eagles in payment of debts, but you're no longer forced to accept dollars -- so bye bye dollars, as they are sold en masse while they still can be. They are hyperinflated globally overnight as everyone else attempts to sell theirs at once, until they finally, rapidly vaporize, going the way of the Continental.
    This seems pretty apparent as the likely outcome. But what if people resisted and said "no, fuck YOU" and kept using dollars? Such a response, which astronomically unlikely, is still a possibility and if it became truth would completely fuck the manipulators. Honestly, I think the same objectives can be accomplished through manipulation of the current system in the ways I described, perhaps save the international aspects... but that could be carried forth later on after the domestic haircut was complete and people were resettled in their newly slashed standards of living. I guess it depends on what "their" strategic objectives and priorities are... something to which I am not privy.
    --

    http://freedomisobvious.blogspot.com
    http://turnyourbackonthem.wordpress.com

    ignominia et contemptum tyrannis

    Habeo excelsum artem; afflixerim cum crudelitate illis qui laedas me

    Shelley's thinly veiled warning to tyrants:

    The monster saw my determination in my face and gnashed his teeth in the impotence of anger. "Shall each man," cried he, "find a wife for his bosom, and each beast have his mate, and I be alone? I had feelings of affection, and they were requited by detestation and scorn. Man! You may hate, but beware! Your hours will pass in dread and misery, and soon the bolt will fall which must ravish from you your happiness forever. Are you to be happy while I grovel in the intensity of my wretchedness? You can blast my other passions, but revenge remains--revenge, henceforth dearer than light or food! I may die, but first you, my tyrant and tormentor, shall curse the sun that gazes on your misery. Beware, for I am fearless and therefore powerful. I will watch with the wiliness of a snake, that I may sting with its venom. Man, you shall repent of the injuries you inflict.

  9. #38
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    Quote Originally Posted by Madison320 View Post
    I don't think that will work because nobody will accept the new currency. I think we are headed for a global fiat currency crisis and so many people are going to get burned that no one will accept paper.
    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.

    Citizens will want gold
    [quote].

    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.
    --

    http://freedomisobvious.blogspot.com
    http://turnyourbackonthem.wordpress.com

    ignominia et contemptum tyrannis

    Habeo excelsum artem; afflixerim cum crudelitate illis qui laedas me

    Shelley's thinly veiled warning to tyrants:

    The monster saw my determination in my face and gnashed his teeth in the impotence of anger. "Shall each man," cried he, "find a wife for his bosom, and each beast have his mate, and I be alone? I had feelings of affection, and they were requited by detestation and scorn. Man! You may hate, but beware! Your hours will pass in dread and misery, and soon the bolt will fall which must ravish from you your happiness forever. Are you to be happy while I grovel in the intensity of my wretchedness? You can blast my other passions, but revenge remains--revenge, henceforth dearer than light or food! I may die, but first you, my tyrant and tormentor, shall curse the sun that gazes on your misery. Beware, for I am fearless and therefore powerful. I will watch with the wiliness of a snake, that I may sting with its venom. Man, you shall repent of the injuries you inflict.

  10. #39

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    Quote Originally Posted by osan View Post
    In an emergency (e.g., WWIII breaks out, and normalcy in international trade is shut down anyway) the US government could pull a China, as they restrict the circulation of EAGLE notes abroad, and limit the number of EAGLE NOTES that can even be exported or owned by non-ally foreigners, the way China has done with its RMB all along. Now you really have bankrupted the dollar for most of the world, albeit selectively. Who takes the haircut? Anyone who is not fer us is agin us.
    Now THIS I must say is a brilliant analytical gem. I had not considered the broader picture of foreign holders of US currency. This aspect renders a new currency scheme eminently logical and obvious. I was looking at this solely as an issue of destroying the American people, but the global aspect of this more general strategy is very compelling; almost conclusively so. This would be a truly brilliant strategic move, though it COULD precipitate war of some large and relatively powerful nation were to take grave exception to such transparent chicanery. That is the downside to this idea.
    Oh I don't think it would cause a war, for the reasons you stated. I do think it would be the likely result of a world war, but only after one has begun. It's just one more leverage we have against everyone who is has become so dependent in so many ways on the dollar. We pull our Jenga base out from the bottom, and everything else topples, because there are no sound currencies in place to take up the slack.

    Quote Originally Posted by osan View Post
    With a fixed rate of exchange initially effect, a distorted mutation of Thier's Law takes over, as "the bad" Fed Dollars are driven completely out of circulation. Now you're forced to accept Eagles in payment of debts, but you're no longer forced to accept dollars -- so bye bye dollars, as they are sold en masse while they still can be. They are hyperinflated globally overnight as everyone else attempts to sell theirs at once, until they finally, rapidly vaporize, going the way of the Continental.
    But what if people resisted and said "no, fuck YOU" and kept using dollars?
    While millions upon millions are doing nothing but selling theirs -- and billions of angry foreigners are standing in the wings hoping to redeem their trillions as well? Anyone could keep using them, I suppose, just as nothing stopped anyone from using Deutschmarks in the Weimar Republic. But you might have to back up a dump truck full of them to buy a pair of shoes, and only because they can be used as fuel. Shifting legal tender status from Dollars to paper Eagles would mean that nobody would have to accept the dollars as payment of debts, public or private. And having an legal tender alternative is what would drive Fed notes out of circulation altogether.

  11. #40

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    Quote Originally Posted by osan View Post
    In my somewhat qualified opinion as a person formally trained in economics, I do believe that with sufficient cybernetic power behind you, it is possible to predict how far one can go in terms of printing "excess" currency before the economy begins to run away from your control.
    Communist central-planners might lick their lips if that were the case because that's the premise communism used, they assume that it is somehow possible to magically quantify & predict the number of things that need to be produced & think that markets can be controlled & market-process is a fiction of economically-ignorant!

    Hyperinflation occurs through the market-process when people lose faith in the currency, & it simply cannot be predicted with complete accuracy because nobody knows at what point people will start dumping the currency, just as it is impossible to predict exactly how much of what people will want to buy at any given price. In fact, "printing excess currency" isn't even required for people to lose faith in the currency & start dumping it. For example, let's say there's some country-X out there with currency-X which has been relatively stable for years with low inflation, now, let's say USD or EUR crashes or there's some other event of global significance & that starts a domino-effect & people in various countries start losing faith in paper-currencies in general & start dumping paper-currencies for real assets then people in country-X MAY also start dumping currency-X & exchange it for real goods/services ASAP even though there's no "excess printing" going on, afterall, a paper-currency has value only until people BELIEVE it to be valuable!

    Of course, it is also possible that the people in country-X may NOT start dumping their currency, even though people in other countries are dumping theirs. Loss of faith in a currency often occurs very quickly but it's difficult to predict what will ignite that initial scintilla which will be the "tipping point"; at first, a few prudent people may start dumping an asset looking at the big picture, then it may cause others to join in & then there's a sudden & really rapid fall as almost everyone rushes out, those who don't drop dead (metaphorically).
    And the problem is that once the "tipping point" is reached, there's no turning back, just as there's no turning back, once one has jumped off a cliff!

    It's impossible for anyone to predict what the "tipping point" will be, will it be 10% inflation for X years? 20% for Y months? 30% for Z weeks? 40%? 50%? 100%? There's no single answer, the "tipping point" may differ greatly with different communities/countries with different educational, social, cultural factors & what not, affecting people's personal choices, afterall, we're all individuals & different, & often, even we don't know how we may react to a certain situation then how will anybody else, let alone "cybernetic power", will know?
    There is enormous inertia a tyranny of the status quo in private and especially governmental arrangements. Only a crisis actual or perceived produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable
    - Milton Friedman

  12. #41

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    [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.

    .

    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.
    There is enormous inertia a tyranny of the status quo in private and especially governmental arrangements. Only a crisis actual or perceived produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable
    - Milton Friedman

  13. #42

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    Quote Originally Posted by Steven Douglas View Post
    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.

  14. #43

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    Quote Originally Posted by osan View Post
    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.

  15. #44

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    [QUOTE=Paul Or Nothing II;4685405]
    Quote Originally Posted by osan View Post
    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?

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