Austrian BCT ftw! Well, at least China's not going to put up with it. They're grumbling for a new reserve currency, and hopefully that will be backed up by something of stable value and finite quantities.
"Moreover, unlike Japan and like Argentina and Iceland, the US is a debtor nation -- not a lender. This increases the likelihood of a run on the currency, which will result in significant currency devaluation."
I'm confused. Isn't Japan's national debt about 120% of its GDP? And our is about 75%. Doesn't that make Japan more of a debtor nation than us?
I'm guessing, but the article is probably talking about total debt, public + private. IIRC Japan has lots of govt debt, but private savings. U.S. has high-average govt debt and also lots of private debt.
Grrr... Austrian economics. The ultimate value of a currency has never been shiny metal, even when we were on the gold standard. The value of a currency is that it allows you to invest in companies in a particular country. That is, if you think there are a lot of companies in the US that are going to return high profits, you need to exchange your money for the USD.
This line is laughable: "It is easiest to define "real value" as the price in gold." Why is this any more valid than the price in silver, corn, wheat, dollars, yen, or cocoa puffs?
you've missed the point of the gold standard entirely.
people don't advocate gold because they like shiny things. people advocate gold because it is a generally accepted numismatic metal for which the supply is finite and dependable, and there is a long history of validating and assaying gold as a measure of trade. you could just as easily substitute any other metal or fixed-quantity commodity like wheat or corn (although cocoa puffs are a product of manufacture so they would make a poor choice).
the point is that the securing asset not be something that can be created at will, as in the case of a fiat currency.
all fiat currencies have failed given enough time. gold has yet to fail once at being a decent store of value over 3k years.
It is, but not only is that not true in practice, its irrelevant. Gold is an industrial good, just like anything else. Its price fluctuates for a variety of reasons, including simple changes in taste.
we are not entering into a "depression", we are witnessing the end of the US and more importantly the death of the US dollar and perhaps all fiat currencies. simply losing the US as a nation will be no more meaningful than losing the british empire. losing the US dollar though is another thing entirely. it will take with it all fiat currencies. three hundred years from now historians will talk about the hundred years lost to recreate a global economy where value had to be absolute, not imagined and printed on a whim whenever a nation felt like becoming wealthy.
10 comments
[ 0.17 ms ] story [ 33.5 ms ] threadI'm confused. Isn't Japan's national debt about 120% of its GDP? And our is about 75%. Doesn't that make Japan more of a debtor nation than us?
The sentence is certainly arguable, I agree.
This line is laughable: "It is easiest to define "real value" as the price in gold." Why is this any more valid than the price in silver, corn, wheat, dollars, yen, or cocoa puffs?
people don't advocate gold because they like shiny things. people advocate gold because it is a generally accepted numismatic metal for which the supply is finite and dependable, and there is a long history of validating and assaying gold as a measure of trade. you could just as easily substitute any other metal or fixed-quantity commodity like wheat or corn (although cocoa puffs are a product of manufacture so they would make a poor choice).
the point is that the securing asset not be something that can be created at will, as in the case of a fiat currency.
all fiat currencies have failed given enough time. gold has yet to fail once at being a decent store of value over 3k years.
see: french revolution, weimar germany.