A new financial order

Discussion in 'Economics' started by paperboy, Apr 2, 2009.

  1. What do you think about this? Sounds like theft.


    "The real goal of the G-20 meetings: Creation of a new financial order based upon drastically new units of paper or fiat money to help wipe the world’s debt ledgers clean.

    How? By systematically and progressively devaluing existing currencies, especially the U.S. dollar, and re-inflating ALL asset prices.

    I suspect the names of the new currencies will be changed to divorce them from any stigmas attached to the current ones and to make the devaluation easier to sell. People would certainly not be happy with a new “dollar” that’s worth only one-tenth of their old dollar (ditto for the euro and yen)."
  2. They will create a new order but I dont think we are going to have asset inflation.
  3. Not saying I agree or disagree, but why would you think we will not? After all, an assets value is is just a floating attachment based on paper right? Looking back at history, there have been extreme price volatility on static assets, it's just an attached valuation right?
  4. Let me be the first to recommend a name for the new currency... Let's call it the "D'oh!"... in honor of Homer Simpson..
  5. That's how currency destruction bankrupts the citizenry. Someone with $100,000 in his retirement finds he now has only "$10,000" of the new currency.

    Sometimes it's even more drastic. There have been times when a currency has been devalued by a factor of 1,000,000:1.... Turkey, in 2005, for example.
  6. jrcase


    Would that $10,000 not buy more goods and services? or are you saying the new currency would be worth (real buying power)the same as the old?
  7. Theoretically, prices would drop by a factor of 10 in the "new currency" as well. The problem is that the average person's assets did not increase nearly as fast as the inflated value prior to the devaluation. At the time of the "official" devaluation, the damage has been long ago done.

    In the example of Turkey, 1982-2005, the stock market soared more than 2 MILLION percent... but when it came to the issuance of the "new" Turkish Lira, the government lopped of "6-zeros".. a 1,000,000:1 devaluation. Even if an investor had been long their stock market for the entire advance, they still lost 98% of their buying power..

    Can you imagine? Making 2,000,000% and still getting wiped out? And it didn't even make any difference for anybody. Whether they "made 2 million percent", or didn't the result was the same. In other words... the ONLY way to preserve your assets during such a time is to NOT have your wealth denominated in that currency.

    Something along that line is in store for Amerika... currency devaluation doesn't have to be in the "millions" to wipe everybody out... 10:1 will be enough to bankrupt 95% of us.
  8. If you sit in paper assets, yeah.

    Lot of opportunities ahead for those who think outside the box.
  9. Could you elaborate on that?
    I'm curious.
    Maybe take as example a guy with a quarter million in TBT. What he can do?
  10. Many shallow thinking responders will say something like "just have your assets in a place to benefit from the inflation and/or currency devaluation... and you can take advantage of it.. in fact, make a TON of money".... the REALITY is that the task is so overwhelming that it's virtually impossible. The ONLY way to preserve wealth is to have your money somewhere which is NOT denominated in the currency being destroyed.
    #10     Apr 2, 2009