Euro is fiat money just like $ with worse fundamentals. I've read somewhere that Germans have their DM notes ready (just in case). I think dollar dominance in the world is over no matter when and how it happens. And ,for a regular Joe in America, it's actually a good thing in a long run IMO. I do not believe we will l ever get back to gold standard (read POWER OF GOLD by Bernstein). But I wonder wether independent Internet currency backed by anything is just a Utopia or it will ever come to pass.Personally I think Internet cannot be truly effectively controlled and it would imply Internet currency will happen but who knows. Any opinions on the subject?
Yeah, I have an opinion: You're right. All fiat currencies are an unreliable store of wealth. Gold has kept up with inflation since biblical times, but short term fluctuations can be brutal. For those who bought the 1980 top, gold would have to trade north of $2,000/oz in order for them to get back to their inflation adjusted breakeven point. The ideal currency is a formulaically weighted basket, encompassing and backed by a diverse basket of commodities.
...now where have I seen that before? "When you accept money in payment for your effort, you do so only on the conviction that you will exchange it for the product of the effort of others. It is not the moochers or the looters who give value to money. Not an ocean of tears not all the guns in the world can transform those pieces of paper in your wallet into the bread you will need to survive tomorrow. Those pieces of paper, which should have been gold, are a token of honor--your claim upon the energy of the men who produce. Your wallet is your statement of hope that somewhere in the world around you there are men who will not default on that moral principle which is the root of money... Then you will see the rise of the men of the double standard--the men who live by force, yet count on those who live by trade to create the value of their looted money--the men who are the hitchhikers of virtue. In a moral society, these are the criminals, and the statutes are written to protect you against them. But when a society establishes criminals-by-right and looters-by-law--men who use force to seize the wealth of disarmed victims--then money becomes its creators' avenger. Such looters believe it safe to rob defenseless men, once they've passed a law to disarm them. But their loot becomes the magnet for other looters, who get it from them as they got it. Then the race goes, not to the ablest at production, but to those most ruthless at brutality. When force is the standard, the murderer wins over the pickpocket. And then that society vanishes, in a spread of ruins and slaughter. "Do you wish to know whether that day is coming? Watch money. Money is the barometer of a society's virtue. When you see that trading is done, not by consent, but by compulsion--when you see that in order to produce, you need to obtain permission from men who produce nothing--when you see that money is flowing to those who deal, not in goods, but in favors--when you see that men get richer by graft and by pull than by work, and your laws don't protect you against them, but protect them against you--when you see corruption being rewarded and honesty becoming a self-sacrifice--you may know that your society is doomed. Money is so noble a medium that is does not compete with guns and it does not make terms with brutality. It will not permit a country to survive as half-property, half-loot. "Whenever destroyers appear among men, they start by destroying money, for money is men's protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. <b>Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it bounces, marked, 'Account overdrawn.' "</b> http://capmag.com/article.asp?ID=1826
Yeah the euro zone economies may have bad fundementals due to the socialists there but I doubt the ECB is printing euros at a double digit hyperinflationary pace. The ECB has a mandate to keep inflation within a targeted range but I don't know how much of their sucess is due to: statistical manipulation - something the US and China are masters at.