The Crisis Is Upon Us
I have days – growing more frequent all the time – when I'm convinced the time is now upon us that some Big Events are about to occur. These fast-approaching events will not go unnoticed. They will affect all of us. They will not be limited to just some areas of our country. The world economy and political system will share in the chaos about to be unleashed.
You can read the whole thing there. I hope that he is wrong but I get that sick sinking feeling. Maybe it is because I fish for the type of news that makes me feel that way. Color me a masochist.
Paul is a fan of the Gold Standard. He would like to have US Dollars backed by Gold.
I think their would be both advantages and disadvantages to this. I also suspect it would be almost impossible to go back now. This country has such massive debt, it seems like that option left us a long time ago. We have debt at the Federal Level, the State Level, Local Levels. We have pension debt, social security debt, medicare debt. We have debt everywhere. And then their is personal debt. We are sinking in a world of debt. I can't see us realistically switching to a gold standard now just for this reason. We are off the ledge. Even trying to do this may hasten the day where it all hits the wall.
As far as the dollar goes, it is backed by nothing but faith. This is an advandtage to us, or at least it has been as Paul points out. The problem is what happens if the global economy loses faith in the dollar. My biggest fear is a massive devaluation in the dollar and rapid inflation.
It should be noted that on the bright side, many other major nations have serious structural issues as well. Europe's wellfare states face a demographic collapse and they have plenty of debt. China's one child policy has demographic implications that will be talked about for decades (I think it unsustainable). Japan has problems with debt and the banking sector that has been reported for quite some time.
So the bright side is that if countries flee the dollar they don't have too many options. But markets do find a way, and the way we have been managing the dollar is no way to run a railroad.
Ron Paul thinks that our money managers have been skillfull in the money manipulation during the decline, with much to our benefit (printing money in exchange for goods).
Ironically in these past 35 years, we have benefited from this very flawed system. Because the world accepted dollars as if they were gold, we only had to counterfeit more dollars, spend them overseas (indirectly encouraging our jobs to go overseas as well) and enjoy unearned prosperity. Those who took our dollars and gave us goods and services were only too anxious to loan those dollars back to us. This allowed us to export our inflation and delay the consequences we now are starting to see.
But it was never destined to last, and now we have to pay the piper. Our huge foreign debt must be paid or liquidated. Our entitlements are coming due just as the world has become more reluctant to hold dollars. The consequence of that decision is price inflation in this country – and that's what we are witnessing today. Already price inflation overseas is even higher than here at home as a consequence of foreign central banks' willingness to monetize our debt.
But he also thinks that this prolonged period of money manipulation has made a bubble "to become history's greatest".
The collapse is going to be spectacular. Sphere: Related Content
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