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What Comes After Paper Money, Part 1: Fiat's Obvious Failure
Submitted by John Rubino via Dollar Collapse blog,
The following chart from Deutsche Bank illustrates the difference between life under the Classical Gold Standard and today’s “modern” forms of money. It’s for the UK only but is a pretty good representation of the world in general:
For the first four hundred years depicted here, money was gold and silver — the quantity of which rose at roughly the same rate as the human population. Prices during that time fluctuated, but only modestly by today’s standards, and they always returned to more-or-less the same level. In other words, money held its value for not just years but centuries. It was a fixed aspect of the financial environment and was therefore not a tool of economic policy. Governments and individuals had to adapt to unchanging money rather than forcing money to adapt to political circumstances.
A phase change occurs in the 20th century when the US created the Federal Reserve and World Wars I and II placed survival above monetary stability for most of Europe and Asia. Violent swings in the value of money became the norm, and with the subsequent worldwide adoption of fiat currencies — which governments can create at will — volatility has soared.
Clearly, something bad has happened — and just as clearly something really bad is coming. The question is what. Inflation and deflation both have their articulate proponents, many of whom (adding yet another layer of complexity) expect both but disagree on the order in which they’ll occur. See here, here, here, and here. This is a fascinating debate, with huge implications for personal financial planning. We all have to choose a side with our investments, and the risks and potential rewards have never been higher.
The follow-on question is also fascinating: What do we use for money once fiat currencies inevitably fail? Will central banks adopt some version of Milton Friedman’s computer that increases the supply of base money by a pre-set amount each year, removing the temptation to inflate? Will cyber-currencies like bitcoin turn out to be secure enough to gain worldwide acceptance, eliminating the need for underlying physical reserves? Is a high-tech gold standard possible, in which physical bullion backs an electronic currency that circulates in place of unbacked fiat currencies? Again, this is interesting in its own right but crucially important for everyone with money to invest.
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Ah yes, "The Persecution of Protestants", good times, good times...[sigh]
in the states the two biggest industries retail (christmas) and the NFL are now behind us so lets get on with it so we can move on with our lives
Why, precious metals of course! Long live the man-purse!
Bitcoin
Sorry to break to you, but gold cannot be used as money in a modern society.
It's inefficient and inconvenient.
even though minted coins are the best they are impractical in today's world. instead, I see a gradual move to debit accounts that register the holders PMs in weight, then converts it to currency by whatever changing value the PMs would undergo as far as ones country or the basic market changes of the silver, gold, platinum or other PM.
peter schiff gold debit card.....
instead of chq/sav/crd account to select on the EFTPOS pad - it will be Ag/Au/Pt
It would have to be based on blockchain (Bitcoin's data structure) to decentralize the infrastructure and avoid counterparty risk. Otherwise you'd be introducing the same old single-point-of-failure centralized systems that have served us "so well" thus far.
Uhh, I disagree. I think the system you are referring to is how all of this BS moneychanger nonsense got started in the first place. I would rather see you pull out a real coin than have you tell me that the bank is holding it for me.
one problem. this:
http://www.alibaba.com/product-detail/10-oz-Gold-Bar-Perth-Mint_60153968...
What comes after fiat is digital currency and everyone microchipped.
<- Gov't gets people microchipped forcing digital fiat on them.
<- Bitcoin disintermediates gov't and people use whatever method they want to conduct payments.
Depends on which way the tree (economic collapse) falls. It will either fall towards freedom and a PM based currency or authoritarian and a fiat based system. Authoritarian's ALWAYS use a fiat system for control. I used to believe that if the system collapsed that the "people" will opt for freedom.......I'm not so sure anymore.
Recently, I bought some English gold sovereigns, one of which was minted in 1893 during the reign of Queen Victoria. Curious to know what it would have bought the year it was minted, I searched the web and found that a shilling (1/20 sovereign) would buy “a plate of beef with bread and beer”.
My local alehouse sells a 'Prime Rib Sandwich' with a 20 oz draft beer for $16 which puts the purchasing power of my sovereign at 20 x 16 = $320, which is exactly what I paid for it.
Most things change over time but not, evidently, the purchasing power of gold.
Apparently beef has gotten a lot better over the years.
You should get a hundred plates of prime rib for that single coin today...all other things being equal.
So the Author assumes that Central Banks will survive the failure of paper money.........WTF......?
Central Banks are not needed, nor are banks for that matter......
The Secret of Oz (by Mr Bill Still)
The wizard of Oz ---> oz. = ounce
I;ve heard plenty of people talk about the symbolism of the yellow brick road, man behind the curtain etc, but noone ever simply brings up the name.
Interesting.....and don't forget that "The Wizard of Oz" was produced by MGM.....Metro GOLDwyn Mayer!
Debt slavery didn't send us to the moon, but the bankers have convinced the politicians that 'debt money' is the only thing that motivates the masses to get off their collective asses and produce prosperity.
You could build a fucking staircase to the moon with all the trillions in debt we've accumulated. The only questions are, should we build it with 50's or 100's and can we get fries with that..........
"Printing" is theft. SDRs will be death.
The banksters need to repay us.
Somewhere in the DC US there is a basement cell with my name on it. Won't you be my neighbor?!
Interesting that this comes from Douche Bank, at this particular time - when most of the world is openly questioning (and some overtly hostile to) the USD stranglehold on world trade. Business Insider is an MSM publication, is it not?
Is Douche Bank preparing the way for re-establishment of the gold standard? I have heard rumours coming thick and fast lately, of a currency reset coming this year. To me, it isn't so much the article that's interesting - being a "gold bug" I pretty much know this stuff already - but the timing of it, and the identity of its publisher.
Germany has already offered to act as facilitator with Russia, for trade with various European and Asian countries, without mention of the US or its "Global Reserve" junk. The SCO has also been presenting a higher public profile this year than ever before. (I think the SCO was established in 1996 or 1998, sometime around there. But I heard nary a mention of it until maybe 2006, and not much even then.) Since 2012 or so, the SCO has gained such a high profile that its shadow now looms over all IMF news.
The Business Insider article quotes Douche's accompanying note as follows:
<<The first obvious point about negative interest rates is to appreciate that in the grand swathe of history deflation has been the norm, not inflation. This reflects the onset of technology so that even before hedonistic pricing reared, what those less rational among us might consider, its ugly head, prices for the same commodities typically fell. The exception of course was negative supply shocks around wars and pestilence that drove (food) prices higher and created temporary bouts of 'inflation.' Generalized inflation for most of history has been about supply shortages.>>
http://www.businessinsider.com/deutsche-bank-uk-inflation-chart-2015-2
Deflation is of course the natural movement of a healthy market. That they are telling the truth about deflation here, again hints to me that a gold foundation may be a feature of the coming reset. I don't follow the MSM at all, but I am pretty sure the MSM party line is still supposed to be "inflation is good", isn't it? Is Douche Bank one of the special banks that would survive the coming reset?
2015 is the Chinese year of the sheep. I am wondering if China will celebrate with an appropriate surprise. So many questions, but I'm starting to feel like I'm watching a birth, of which the contractions are now only minutes apart.
2015 is the Chinese year of the sheep.
Big party planned in the USA!!! Baaaaaaaaaa . . . . .
A gold back SDR. I like the sound of it.
Currency controls instituted in South Dakota.
Any withdrawal over $2500 in cash subject to 1% fee.No notification in advance from banks teller window blames it on shortage of currency (fed fiat) and inability to accquire.
Pull the other finger,..things seem to be speeding up.
Knuckles noticed the fed pulled 30% of the monetary base from oct to early dec. I remmember a news story about the treasury had destroyed 5k tons of worn us frn about that time. When I read at martin armstrongs site the other day 29% of us citizens are hoarding cash outside the banking system. That was a big. Huhmmmm that hit me
Banks don't have any cash nowadays. They deal in credit cards and checks.
Just try to cash a check for over $10 grand. Chances are a small main-street bank won't have enough FRNs.
Modern day Bonnie and Clyde would be wasting their time.
Nobody writes a personal check for $10k and over and nobody would cash one.
Check your IRS rules.
Renfield. Great point about who and why now. Same could be said of snowden and anonymous and isis.
Central planning extends way beyond banking. ..
Read that again.Whose money WAS it?I didn't demand 1% (edit)of each $2500 as you fuckers lent it out or vaporized digitized it.
Before inflation they had debasement. That means making the coins smaller but calling them the same value, or adulterating the precious metal with cheaper metal.
When the value of a currency goes to zero they just start over with a new currency. Germany had 4 different governments and 4 different currencies in the first half of the twentieth century. The Italian lira was the monetary equivalent of a subatomic particle before they went to the Euro. In England they don't even have shillings anymore.
Before WW1 the French franc, English shilling, Italian lira. German mark, Dutch guilder and American quarter were all worth about the same, all about the same size and all made of silver.
You would be doing a wee bit better - 21 shillings in a guniea !
Now I cant pick up my sporty 1967-69 M 4WD 24 volt something Vietnam truck and flatbed it down here to save wear and tear on its $800 each tire without some fucking .gov/bankstah middleman intercepting the transaction.
Plastic fuggin fantastic!Deal with machinery and items in cash that way you can lie about what you paid to authoritay and sidestep those money grubbin middlemen.Beneficial both parties.
Christ when I lived in NJ my older brother and I used to sell each other cars n' trucks for $1.
You are banks and have vaults I would like to take an audit of aforementioned instead of being kind and conducting $8k cash transactions giving you a week to get a truck out there.
Fuckers!SHOW ME DE MUNNAY!!!
Mandel as long as you had things planned out and let the banks know a little ahead of time as little as 2 years ago walk in with your satchel/strapped insert FRN exit.One hardass bank didn't have any counting machines when I popped in WTF,..all the tellers a counting for one customer PRICELESS
<server burp DP?>
What comes after paper money?
(you expected maybe the Shining City upon a Hill?)
I find Martin Armstrong's theory most compelling. I mean, I think he advised the Swiss to lose the peg, because the first one who panics, wins. He's advised a lot of governments and he says it'll be a global currency, after the big bang.
He says the little guy can survive using metals.
The big boys can stay in SP500 blue chips.
Say your prayers folks.
I do not know if this is 1% $2500 cash withdrawal fee is statewide or just due to my semi-remote area (hopefully far enough away from Omahoe!).
YET
Tune in tomorrow! :>
<EDIT>
GOOD LORD I hope every future BM does not stink like the one I just had from my first bout with catfood helper.
Heavens Above!Fetch the Lysol Enid!
Supposedly all roads lead to Basel and the New (improved) NAZI World Order (the same as the Old Nazi World Order)
https://www.youtube.com/watch?v=cnd0nzeuM5s
"The BIS is the most obscure arm of the Bretton-Woods International Financial architecture but its role is central. John Maynard Keynes wanted it closed down as it was used to launder money for the Nazis in World War II. Run by an inner elite representing the world's major central banks it controls most of the transferable money in the world. It uses that money to draw national governments into debt for the IMF."Birds of a feather flock together and the most diverse cast of characters are busily pushing the BIS as the way forward. Smells very very fishy unless you have no problem being "credit chipped" and your life and family's pegged to the all seeing all controlling Global Credit Machine of the anglozio agenda..
http://philosophyofmetrics.com/category/sdrs-and-the-new-bretton-woods-2...
http://www.alt-market.com/articles/2491-failing-stimulus-and-the-imfs-ne...
http://www.financialsense.com/contributors/jim-rickards/death-of-money-i...
All very interesting and convoluted arguments etc etc...but I still don't see the Russians and Chinese allowing their henhouse to be guarded by the same lecherous Red Shield wolves and hyenas that gave us the carnage of the last 2 centuries.
Stack!
Q: What comes after paper money ?
A: Social security welfare system debit card for 99% who own no capital and have become unemployable
"Before WW1 the French franc, English shilling, Italian lira. German mark, Dutch guilder and American quarter were all worth about the same, all about the same size and all made of silver."
Then along came the Fed Res and totally fkd everything!
The banking syndicate will never give up its priviledge. When the current fiat money system fails they'll simply create a larger, centrally controlled fiat money system. It looks like SDR's are their next play. Control, control, control.