Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: orkrious who wrote (13962)	5/15/2004 1:59:54 PM
From: Canuck Dave	Read Replies (1) \| Respond to of 110194

There were a lot of quotable remarks in that article, LOL. There are historical precedents for what we are seeing today. The most obvious are Rome and the experience of John Law in 18th century France, but I did some research into Chinese paper money and they had numerous paper money collapses before abandoning it altogether. Here are some of the common themes. 1. An entrenched ruling class living beyond its means and wishing to buy protection rather than fighting for themselves. Think mercenaries, Great Walls and missile defense shields. 2. A fiat currency is introduced, at first causing a spectacular rise in economic activity as it greases the wheels of commerce. 3. If a little currency inflation is good, a lot must be better. Everyone parties in the newfound wealth. 4. As strains emerge, the ruling class starts to make stupid laws trying to legislate and control the value of the money. 5. Someone outside the control of the ruling elite tries to match debt obligations to real value and it's all over. 6. In time, the order is overthrown as it can no longer pay for protection. I think at this point we have to start asking ourselves "What do we do after the collapse?" I am also intrigued by the "A little fiat can be a good thing, but how do we control the amount?" issue. I guess the obvious answer is not to become an entrenched ruling class. Easy to say, but humans gravitate towards pleasure... CD