Yep. I dont think most people have realized that how massive this problem is. It really is a black swan. In the early 90s a lot of banks failed. now the entire global banking system might fail Think about it. This problem goes from california to china and leaves no economy untouched
Another key point here is that just because fiat currencies are relative, this does not mean that hard assets cannot experience hyperinflation with regards to all the fiats....in their representative countries... Also, the idea of any asset considered to be a currency bouyancy vehicle, will be subject to its own supply demand issues.... Let's say I print a piece of paper.... My military and reputation says it is worth $100.... Then I print 1000 times more of the same paper, and I still want to insist that it is worth a $100.... Well, who is to say that the paper is not worth $100 ? Those that have a demand for it....or do not any longer have a demand for it.... Ok, so in reality if I print the picture of a flower on one currency, and I paint a picture of a gun on another currency, are they not the same ? So what makes them different ? What makes them different is how they handle their financial affairs....whether as a people or as a country they save money and do not incur too much debt.... So what is it about Indonesia Argentina Dominican Republic Iceland Turkey Iraq Brazil Russia US Euro Swiss Franc Zimbabwe etc... that would make one piece of paper worth more than another...? It is simply how the governments run their financial affairs..... What if all countries behaved the exact same, spent the same amount of money, saved the same amount of money, etc...? Then how would the currency valuations differ?
Bernake and company are the reason we did not enter a depression. All those who were, and some silly leftovers, calling for a hike would have sent us there. If you read his speeches on the irresponsible panic type behavior that caused the Great Depression, such as raising rates and some foolish countries going back to gold standard, you will understand he is on top of this. If they raise rates the system will lock up like a seized engine, and yet people have been screaming for this. Do you want breadlines? They must add the poor dollar. This is only a slowdown and not a screeching halt because of Beranke. Those who want doomsday because they feel they are right about some mal investments made, are not going to get it. Yes he is raping the dollar. And more bailouts = more dollar debasing. But what is the alternative? And remember this on the dollar, its all relative. Other currencies will loose value as well. Gold? might as well go back to using sea shells like the indians. No currency you can dig out of the ground is worth anything in the 21st century.
ha ha ha. keep drinking the kool aid. By the way the fed was enacted before the great depression in order to prevent the such things from occuring Dollar debasement wont do any good if there arent any credit worthy borrowers
You make it sound like the Fed saved the country from it's foolishness, but in reality it was the Fed that got us into this situation in the first place by keeping rates too low for too long!
I too bro can't help from laughing (or crying) at how friggin' delusional these morons are in regard to history. They act as if debasement via low rates is something just recently discovered. Like a cure for cancer. A remedy so unique that only economists from Princeton know of it's existance. Isn't it magical. Turn a dollar into the value of a dime and all of a sudden it's so much easier to pay off dollar debt. EUREKA! What a cutting edge thought.
We can blame Greenspan. I look at differently and blame greedy bond traders. And they are suffering for it now. No amount of easing will save them in the end. Their products are junk. The fact that Greenspan endorsed that junk, just means he was a fool, it does not prove he was captain of the ship that wrecked. These bond traders did it before in the late 80's. They are beyond reckless and play fast and quick without thinking ahead because they don't have to. They simply dump this packaged crap on someone else. Small banks who should not be playing with these bond sharks end up going out. It all comes back to them in my opinion. They should be heavily regulated. As long as we keep blaming the Fed or equities we ignore the real bastards, the bond traders.
But all in all good policy is that policy which is willful and directive in the sense that one knows the real game is one's policy versus another.... In the dollar's instance, it is quite possible that the UK economy and debt picture can become very similar to that of the US.... If so, then what happens to the Chinese, Brazilian, Russian currencies, etc...Not long ago, the Russian currency was in shambles.... Just what is a bank going to put fiat money in ? Even if there is a smaller perfectly run country, perhaps such as Switzerland.....then the problem becomes there is not enough Swiss currency around to give everybody $1.....Thus placing the level of assets that are necessary is not possible..... Thus the real question becomes where is there a currency that has the outstanding float that can serve safekeeping hard money needs ? So what can be at play is a far more complex game of comparativeness.... Some investors thought that they will turn commodities into a currency....however this supply is finite as well.... To one extreme....what if every country was the exact same as Zimbabwe ? Would the currencies for all countries not be the same except for the pictures on the paper? So the game becomes one of relativeness.... The US stock market is still one of the better overall world performers, the China market is down approx 50%.....etc.... So things can change on a dime.... Those of you who travel remember well when it was really much cheaper to travel in Europe...and more recently Argentina..... What happens if WalMart no longer buys from China? What happens when all US housing prices get back to late 80's early 90's levels ? The comparing game is more than meets the eye......