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Strategies & Market Trends : US Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: gpowell who wrote (11)	9/29/2008 4:15:49 PM
From: gpowell	Read Replies (1) \| Respond to of 97

All assets carry an implied promise. Notice that we can think of a machine or a building as constituting contingent promises of future delivery. Exchanging current resources for a contingent promise always involves some risk that the promises will fail to be kept - and therefore any analysis of a monetary base of fiat reserves must start with this risk. Assuming that the risk of default on the implied promise of fiat money is 100% because it is "merely a promise" is not a good start. Notice, in this era of high risk perception, to which "assets" individuals flee? Fiat currency (dollars specifically) and government debt (US Treasuries).