10-31-2008, 10:22 PM
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#1
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Veteran Starter w/Big Long Term Deal
Join Date: Apr 2006
Location: Central Mass
Posts: 8,342
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US President Richard Nixon “closed the gold window”. Inflation unleashed.
Financial Sense "August 15, 1971: Inflation Unleashed" by Nick Barisheff 05/11/2006
Quote:
The general public, the media and most financial observers were largely unaware of the momentous event that took place on August 15, 1971. However, the implications of that event have had an enormous impact on global financial conditions ever since. On that date, US President Richard Nixon “closed the gold window”. In essence, this meant the US would no longer honour the Bretton Woods Agreement of 1944, which made the US dollar the world’s reserve currency, and allowed other countries to convert their US-dollar holdings into gold. In simple terms, the US defaulted. Those who may have glanced at the announcement buried within the pages of their daily newspaper were unlikely to have understood the implications for their financial future.
Under Bretton Woods, there was some control over the money supply since other currencies were convertible into US dollars, and the dollar itself was convertible into gold. With the demise of Bretton Woods, the entire world found itself on a monetary system backed by nothing more than the faith and credit of individual governments for the first time in history – a pure fiat system. This meant there were no longer any restraints on the amount of money that individual governments could create at will. As a result, a flood of paper money was unleashed globally, a trend that has increased exponentially over recent years.
There is little chance that the mountain of US debt will ever be repaid, or that the US trade deficit will be reversed. Without massive inflation, the US has no way to meet its $50 trillion Social Security and Medicare obligations. As global investors look to other currencies, they will realize they are not fundamentally any better. Most foreign central banks will attempt to debase their currencies to match the decline in the US dollar in order to stay competitive in exports, resulting in a round of competing currency devaluations where all paper currencies decline relative to gold, silver and platinum. Individual investors, institutions and central banks will turn to the historical safe haven of precious metals to protect their wealth.
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So with the above article. would it seem that with these bailouts and stimulus plan we are actually accelerating our demise and bringing about a gigantic collapse and the death of the dollar and the final bankruptcy of the country.
I don't see any way of keeping the country going without any actually production and positive trading of goods with foreign countries.
If we can just print money, print more, give it to people and no one will have to work.
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"There are two categories of superbowl participants that nobody remembers:
The team that lost the game and the team that only won one." Dwight White- Steelers
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