Saturday, July 07, 2007

Fiat currencies like the US dollar

I agree with this article almost 100%

I say I agree "almost 100%" because when a crash of the fiat dollar does occur, I don't believe that it will be as bad as this article suggests: too much is riding on making any crash "gentle" and drawn out. If the dollar lost 60% of its value in one year, that would be a catastrophe, but if the dollar loses 75% of its value slowly and steadily over 10 to 15 years, then I think that society will slowly adapt: lots of cutting back on expenses, sharing homes, eating a less expensive vegetarian diet, and generally cutting living expenses as much as possible. People are resilient and adaptable, and for things that really matter, most people will still lead a good life.

I believe that this article is correct: our government and big business are doing everything that they can to postpone the fiat dollar collapse (invaded Iraq and currently threatening Iran, Venezuela, and even Russia with our threat of a missile shield around their borders). My personal opinion is that our elite class should let the crash start to happen in a slow, steady, controlled way -- and perhaps that is what is exactly happening right now with diminishing purchasing power of the dollar for food, housing, education and transportation (thankfully offset somewhat by cheaper imported goods).