Comments (4)

• Siggyboss

  Major events in history approach. All we need is a single non-US central bank to abandon decades of mercantilism. Even a slight withdrawal from the purchasing of US treasuries by Asian central banks could mean a run on the US dollar. Yet, the Soviet Union went on for seven decades and almost everyone admits it was a failure. How long will people keep believing the world is flat?

  Published: January 26, 2008 9:45 PM

• Michael G.R.

  I read something in a Canadian newspaper recently. It went something like this: "When times are good, people say that the government should spend more. When times are bad, people say that... the government should spend more."

  Quite scary.

  Published: January 27, 2008 3:09 AM

• David White

  Ah, but look who Ron Paul has named as his economic adviser. Watch for him to give Larry "Cutlow" what-for and otherwise give the both parties hell for their stupidity:

  http://www.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20080125005694&newsLang=en
  

  Published: January 27, 2008 9:42 AM

• Republicae

  Our present Fiat Monetary System, like all that came before it, has a finite life-span due to the fact that it is completely dependent upon the creation of debt for its existence. Since each and every single Federal Reserve Note and every other currency in the world must be borrowed into existence each of them basically represent a legal notification of a debt obligation, or an IOU.

  Due to the fact that each "dollar", whether physical or digital, is created by the formation of debt, the debt is proportional to the circulation of the currency. However, since the currency is borrowed it also carries with the primary debt an added interest obligation. Since all economic growth in this country and around the world now depends on the expansion of credit and conversely debt, there will come a time when the debt demands far more than the economy can service because the debt multiplies exponentially due to the addition of the interest obligation.

  In a fiat monetary system the debt can never really be paid down without contracting economic growth, it simply continues to multiply. In very simplistic terms, when the government does "pay" against the periodic principle and periodic interest obligations of the debt it must immediately re-borrow that amount to maintain the expansion of the economy. Since the debt multiplies exponentially it is irreversible and will continue to expand due to the weight of the interest obligations of the original debt.

  The Federal Reserve economy, and for that matter all Central Banking Systems which rely upon a total fiat monetary system is can be likened to a balloon with the skin of the balloon representing the economy and the air representing the circulation of fiat currency, therefore the debt. The action of inflating the balloon is the expansion of the money supply/debt. The Federal Reserve blows air into the balloon, and although it should allow for a little deflation between breaths now it simply takes the deflated amount from the balloon and blows it back into the balloon. Eventually the outer skin of the balloon can no longer contain the amount of expansion from the internal pressure of the debt and collapses due to the demands of the internal debt.

  Every fiat system in history has been shown to have a finite life-span, ours is no different. Eventually, and I think we are already seeing it, the skin of the economy can no longer maintain viability due to the internal pressure of the massive debt that siphons off the structural integrity of the economy.

  The entire system terminates itself due to insoluble debt. Now, the question is what do you think happens to all those government programs, government bonds, investments, pensions, insurances, 401ks, savings, corporations, jobs and even the basic services that depend on our fiat monetary system?

  What happens to you and your family when the fiat monetary system collapse under the weight of the debt that solely forms its entire foundation?

  Published: January 27, 2008 7:31 PM