Whenever in the history of money a country goes off the gold standard it becomes irresistible to just keep the printers pumping out more and more money. In modern times, money is always issued along with debt in the same amounts. It always ends the same, Venezuela, Zimbabwe, Germany in the 1920’s. The currency eventually becomes worthless. But it can go on for a long time before that happens. The US dollar has already lost 97% of it’s value over 50 years, so there isn’t much left to lose. Here is a short article about it from Zerohedge:
The US dollar became fiat currency when it stopped being backed by gold over 46 years ago and it has lost 97 percent of its value since the establishment of the Federal Reserve in 1913.
Still worth more than the Ruble?
Probably not for long, Russia has a huge gold reserve and is adding to it mightily.
When I was a kid back in the 50’s I could buy a candy bar for 10 cents with a real silver dime. Today, that dime is worth $2. or so, about what a candy bar sells for today, and that candy bar is HALF the size of the one I bought 60 years ago!
The big story of this decade will be the collapse of fiat currencies. I believe one way we can all use gold and silver again is gold and silver backed block chain. Lots of companies in the works with it. The sad thing about Venezuela is when their currency lost it’s value they had nothing to fall back on, no one owned any gold or silver, so now they just have to barter or steal. I hear you can buy 6 months of food for ONE OUNCE OF SILVER in Venezuela.
The way it would go is like it went in Venezuela. Take a close look at the result. Starvation, empty stores, No jobs, business at a standstill, roads crowded with banditos. It’s not a pretty sight. And the only way to get the economy started again is with an intrinsically valuable currency. And in Venezuela almost no one has gold or silver. How about the US? Do ANY of you have gold or silver? Probably one in 100 Americans has any. It will go just the same way, mad max TO THE MAX!
Debt grows faster than the increased GDP which is supposed to service the debt.
The Faster America “Grows”, The Faster America Goes Bust
As of October 1st of 2007 (the start of the 2008 Federal Government fiscal year), federal debt stood at $9 trillion and 70 billion. In the subsequent ten years and five months, the US federal debt has grown $11 trillion and 805 billion and now stands at $20 trillion and 875 billion (chart below). Over the same period, US GDP grew $5 trillion and 169 billion. Simply put, for every $1 of new federal debt undertaken, the US achieved $0.44 cents of economic activity or “growth”
It is like they know there is no tomorrow so why not blow it out like mad.
h/t Natura Naturans
Related Posts:If everyone who reads our story, who likes it, helps fund it, our future would be much more secure. For as little as $10, you can support the IWB – and it only takes a minute. Thank you. 993 views