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Strategies & Market Trends : The coming US dollar crisis
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To: Real Man who wrote (53817)11/10/2013 8:56:03 PM
From: Tommaso  Read Replies (2) of 71463
 
>>>Yeah, this thread should be shut down. Monetary base surges 4.5 fold, yet nothing but free money bonanza at no cost.<<<

That's quite comparable to when John Law introduced unbacked paper money to France about 1715. I always forget the exact date.

But then England and Holland were on sound money, so if you could get your francs out in time and change them you were fine.

Now all the central banks are creating imaginary balances.

Here's where we are headed now:

"The weak spot in Law's scheme was his willingness to issue more bank notes to fund purchases of shares in the company. Stock prices began falling in January 1720 as some investors sold shares to turn capital gains into gold coin. To stop the sell-off, Law restricted any payment in gold that was more than 100 livres. The paper notes of the Bank Royale were made legal tender, which meant that they could be used to pay taxes and settle most debts. The company was trying to get people to accept the paper notes rather than gold. The bank subsequently promised to exchange its notes for shares in the company at the going market price of 10,000 livres. This attempt to turn stock shares into money resulted in a sudden doubling of the money supply in France. It is not surprising then that inflation started to take off. Inflation reached a monthly rate of 23 percent in January 1720."
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