This Is Only The Beginning

October 10, 2008 at 5:25 pm (Banking Crisis)

Things are bad in the financial world and everyone knows it.  Everyone is hoping, however, that things will get better tomorrow.  Some people ask me where I think we’re at in this downcycle.  Here is an easy way to know how much more we have to go: do you still use dollars as currency? 

Well, then this isn’t over yet.

Check out this bloomberg article foreshadowing global market closings.  Unimaginable.  The virus in the host is the fractional reserve lending method.  No amount of regulation or crackpot bailouts will ever change the fact we have a fiat money system based upon nothing but faith.  Nothing.  And not only that, but the credit allowed to be based upon the nothing is exponentially multiplied.  A more absurd system of currency I can’t imagine, other than perhaps letting people make their own currency by scribbling values on scraps of paper.

Fortunately, the article above talks about a new Bretton Woods, when at least our money was backed by something tangible and stable; gold.  If we return to a gold standard, that would be an excellent solution.  (And of course would show that the only politician in America who has any clue is Ron Paul.) 

In other news, here is a list of states that can’t pay their bills.  Should they reduce spending?  Of course not!  They’ll just borrow more paper from the Government!  Until we admit defeat and stop trying to regulate our way out of this mess caused by regulation (the worst example of regulation being the existence of the Federal Reserve), the best scenario we can hope for is hyperinflation.  The worst would be default of the dollar.  And forget about buying up stocks at the lows

Today’s article of doom: How many times can you use the word “severe” in a headline?


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