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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: Crimson Ghost who wrote (24901)	8/9/2003 2:10:02 PM
From: Rarebird	Read Replies (1) \| Respond to of 89467

Today, there is no cash currency, so there is no real economic bottom. All our so-called money is printed paper and cash is a minuscule portion of the total means of payment. The much larger part exists in private and corporate accounts inside banks and all of it is simply de facto claims to paper money. This means that any really great monetary and financial upset would take place in two stages. First, financial assets would fall drastically in value, scaring many people into holding modern "money" - not HARD money but cash PAPER money. If the financial breakdown went further, then the paper money itself would be at risk. If it broke down, the economy so affected would be reduced to barter. Of course, this is a euphemism for: "Please DON'T think about this". It is not unthinkable because one of the oldest absolute laws of reality states that from like causes come like consequences. This is also a monetary law which many millions of people in Latin America can attest to. They have had more different currencies introduced than most of them care to remember, always after the previous one had broken down irretrievably. Now it is the US which is breaking all the hard fundamental rules in regard to both money and credit, as well as all the fiscal rules and principles known since Adam Smith was a boy. Bush and Greenspan are like two idiots, side by side in the front seat of a car not maintained for years and riding on bald tires. They have all four feet firmly planted on the accelerator, driving faster and faster, yelling out the window - "Boy - this is REALLY 'stimulating'". The best way to describe the present situation is to see it as two people sitting in a tree and taking turns to saw away at the branch they are both sitting on. What one can say about such a situation is only that if they keep sawing, the branch will break off and they will both crash to the ground. No problem, if it was only Bush and Greenspan on the branch. Sadly, all other Americans are sitting below the same branch, as are most people in the rest of the world. If the branch which is the US Dollar falls, it will land with a crash on everybody all around the world. The other problem is trying to time the fall. Since most people really do regard the problem as "unthinkable", timing their actions is impossible and trying to do it is dangerous. The solution is to pre-position oneself for the fall.