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A Thousand Pictures Is Worth One Word: Worthless
Jeff Clark of Casey Research has created a wonderful historical "art" album which addresses the number one question which most people living in the US right now are unable to fathom: how can one's currency go from X to 0. It is impossible. It certainly can not happen to the dollar. Right? Well, as Jeff says: "History has a message for us: No fiat currency has lasted forever. Eventually, they all fail. You might suspect this happened only to third world countries. You’d be wrong. There was no discrimination as to the size or perceived stability of a nation’s economy; if the leaders abused their currency, the country paid the price." We may add one other thing: no country in the history of the world has imploded from hyperdeflation. Not one. At the point where the debt load was insurmountable and not enough cash flow was being generated to sustain it, the authorities would always find a way to step in and be the terminal source of dilutive fiat demand: from ancient Rome, to Weimar, to the collapse of the Soviet Block, to, inevitably, the unwind of the failed (neo) Keynesian model, where we are right about now. Sure, we can all come up with goalseeked theories that validate our perspective but they are all meaningless at the end. Past a given threshold debt money ceases to function as backed by the full "faith and credit" of the backstopper and is nothing but paper. Yes. Even the abstract concept of so-called "reserve" currencies. Quote Clark: "As you scroll through the currencies below, you’ll see some long-ago casualties. What’s shocking, though, is how many have occurred in our lifetime. You might count how many currencies have failed since you’ve been born." There are many more where these came from. Thousands in fact. Which brings us to the title of this post. What are all these images, which is really all they are now - fancy paperweights (no pun intended) from near and far history, worth now? Precisely.
Yugoslavia – 10 billion dinar, 1993
Zaire – 5 million zaires, 1992
Venezuela – 10,000 bolívares, 2002
Ukraine – 10,000 karbovantsiv, 1995
Turkey – 5 million lira, 1997
Russia – 10,000 rubles, 1992
Romania – 50,000 lei, 2001
Central Bank of China – 10,000 CGU, 1947
Peru – 100,000 intis, 1989
Nicaragua – 10 million córdobas, 1990
Hungary – 10 million pengo, 1945
Greece – 25,000 drachmas, 1943
Germany – 1 billion mark, 1923
Georgia – 1 million laris, 1994
France – 5 livres, 1793
Chile – 10,000 pesos, 1975
Brazil – 500 cruzeiros reais, 1993
Bosnia – 100 million dinar, 1993
Bolivia – 5 million pesos bolivianos, 1985
Belarus – 100,000 rubles, 1996
Argentina – 10,000 pesos argentinos, 1985
Angola – 500,000 kwanzas reajustados, 1995
Zimbabwe – 100 trillion dollars, 2006
Clark concludes:
So, will a similar fate befall the U.S. dollar? The common denominator that led to the downfall of each currency above was the two big Ds: Debts and Deficits.
With that in mind, consider the following:
Morgan Stanley reported in 2009 that there’s “no historical precedent” for an economy that exceeds a 250% debt-to-GDP ratio without experiencing some sort of financial crisis or high inflation. Our total debt now exceeds GDP by roughly 400%.
Investment legend Marc Faber reports that once a country’s payments on debt exceed 30% of tax revenue, the currency is “done for.” On our current path, analyst Michael Murphy projects we’ll hit that figure by October.
Peter Bernholz, the leading expert on hyperinflation, states unequivocally that “hyperinflation is caused by government budget deficits.” This year’s U.S. budget deficit will end up being $1.5 trillion, an amount never before seen in history.
Since the Federal Reserve’s creation in 1913, the dollar has lost 95% of its purchasing power. Our government leaders clearly don’t know how – or don’t wish – to keep the currency strong.
Whether the dollar goes to zero or merely becomes a second-class currency in the global arena, the possibility of the greenback being added to the above list grows every day. And this will lead to serious and painful consequences in our standard of living. While money is only one of many problems we’ll have to deal with, you can protect your assets with the one currency that can’t be debased, devalued, or destroyed by irresponsible leaders.
Because when it comes to money, worthless is not a fun word.
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Yes, like the Romans, the Babylonians, the Chinese, the British all were, a couple of decades before they weren't
See the above list of failed empires
see above list of failed empires
see above list of failed empires
Yes.
The majority of USA's supposedly huge economy is consumption and services measured in a currency which has value due to its reserve status. This USA runs a huge trade deficit, consumes much more oil than it imports, has moved towards a socialist model that stiffles productivity and efficiency, has a society and urban landscape utterly based around oil consuption at a recognised period in history where cheap oil is ending and runs a 1.5Tn deficit...
I don't think the USA will be alone - standards of living will drop across UK and parts of Europe.
I agree and have said so...no sudden collapse. Just a nice sustained inflation that ends up in the same place.
We can project power as a result of oil. What happens if 1) we had to attack and seize fields, 2) someone nuked us for it?
There are a lot of scenarios where this force projection comes to dick. And I don't mean nuked the mainland, I mean vaporized a carrier with one. A surgical application of nuclear arms could greatly level the force projection playing field and these would be legitimate military targets.
All "someone" has to do is nuke the oil fields. Don't have to try and hit a city or a carrier. Just deny the resource. It's such a classic, well tested strategic principle that you can bet it will happen. Then... all the fiat in the world won't help.
Yes, let's forget that the U. S. Dollar has lost one percentage point of its value for each of the last 98 years. That trend is "transitory"! Tuco Benedicto Pacifico Juan Maria Ramirez
well said
...everyones the same except for us
...and "true" military empires never fail
...except when they do
"Third world nations? African, despotic regimes? Revolutionary France? Post WWI Germany?"
How about," Post war USA"
How about Post war USA? For the years I have been alive I have never once seen America not in a war.
This time looks different. I have never heard of this much debt either.
my last serious brazilian gf who was 20 lol remarked the same thing. Apparently around the world they study US history a lot more than the converse. She was like you guys are always in wars. And I say the same thing, US history lately is a history of warfare.
But, then, this is the way of nations that embrace the usury clan. Wars and empire are inevitable. Just read the old testament.
"Post WWI Germany?"
Post-WW1 Germany was the 3rd largest economy in the world at the time. That's not exactly third-world.
Make no mistake - the US$, as the world's reserve currency, will not hyperinflate. But it may well hyperinflate *after* it ceases to be the world's currency.
I don't see where he says it'll happen over the short time horizon. No one knows the timeframe, of course. He's just making the point that - counter to what many believe - it *can* happen to the US$.
Impact of World War One on the Weimar RepublicThe problem with Casey throwing this out there is that it's a cheap trick.
It goes like this: Hey guys. Did you know that currency hyperdevaluation is more common than people assume? Did you know that not every country that experiences it is small or materially unimportant to global trade? (tenuous argument given the list Casey provides). Did you know that the U.S. has a currency and that...hmmm...you know...I'm just thinking that it may not be immune from the same fate as the list of these other currencies, theoretically, you know?
So what exactly is Casey saying?
I'd give a suggestion. For his next exercise, maybe he can show us how a nation similarly situated to the U.S. in terms of size of economy, possessing reserve status, with a similarly sized military with equivalent capabilities, and even with a debt-to-GDP ratio as high as ours (what's that, Casey, you are now saying our debt-to-GDP ratio is not as incredibly high as you may have insinuated?), and with all the other important attributes, good and bad, of the U.S., has undergone a sudden collapse in its currency or suffered a sudden bout of hyperinflation.
But I'll save him the trouble. He can't.
"This is somewhat disingenuously INSINUATING that the U.S. is going to lose world reserve currency status over a short time horizon, suffer hyperinflation and an economic collapse, without actually stating the case for this scenario, or the timeline over which it would transpire."
TIS, there's a lot of info out there if you look around. The case to de-peg the USD as the world's reserve currency can be made. Do some research on just this narrow issue, world oil production and de-pegging the USD as the world's reserve currency. Search: INTERNATIONAL MONETARY FUND - The GCC Monetary Union—Choice of Exchange Rate Regime - August 28, 2008
Islamic gold dinar, Oil, and Khaleej dinar – December 8th, 2008 by Ivo Cerckel
Gold is wealth. Oil is the only commodity in the world that is large enough for gold to hide in. The fact that the (USD) dollar is still being used as the intermediary numéraire for oil-trade settlement, as the intermediary basic “standard” by which values are measured for oil-trade settlement, gives this dollar paper the backing of oil (oil becomes an indispensable valuable).
http://bphouse.com/honest_money/2008/12/08/islamic-gold-dinar-oil-and-khaleej-dinar-%e2%80%93-first-exploration/
Gulf countries are keen to break away from the link with the US dollar because it ties them to inappropriate monetary policies that exaggerate the boom-to-bust cycle in their economies. by: Peter Cooper December 31, 2008 http://seekingalpha.com/article/112731-will-the-new-gcc-single-currency-include-gold
Gulf countries 'should abandon dollar peg and float currencies' - March 1, 2010
Since 2001, the six GCC countries have been in talks to de-peg from the dollar and create a single currency. A deadline was earlier set for 2010, but talks fell through after Riyadh was selected as the base for the future central bank of the single currency.
http://gulfnews.com/business/economy/gulf-countries-should-abandon-dollar-peg-and-float-currencies-1.590752
Unreported Soros Event Aims to Remake Entire Global Economy - March 23, 2011
George Soros described in the 2009 op-ed that US-China conflict as "another stark choice between two fundamentally different forms of organization:international capitalism and state capitalism."He concluded that "a new multilateral system based on sounder principles must be invented." As he explained it in 2010,"we need a global sheriff."
http://www.mrc.org/
Point to ponder - without a stable, adequate daily oil supply, the world's lights will begin to flicker, if not go out all together. At least 2.3 mbd in ME oil is not being produced since ME unrest spread in the region early this year. Most major oilfields are in decline. Iraq is trying to ramp its production but without oil, where is the energy coming from to fuel the world economy? What organizations and countries control the largest amount of oil production? Are they keen on replacing the USD as the world's reserve currency and de-peg from the dollar and create their own single currency? Are Russia, China, Brazil and France involved in cutting a deal with the GCC oil producers?
The Persian Empire.
The Roman Empire.
The Holy Roman Empire.
The Mongol Empire.
The Qing Empire (China)
The Han Empire (China)
The Yuan Empire (China)
The Ming Empire (China)
The Mayan Empire.
The Ottoman Empire.
The Spanish Empire.
The British Empire.
The Soviet Empire.
. . . . . .
The American Empire.
"Who'll be the next in line?
Who'll be the next for heartache?"
Kinks
While your argument has merit, you're the one doing a damn fine job of embarrassing yourself.
First, when insulting someone for being stupid, it's a good idea to get their name right. In this case it's Jeff Clark (who happens to work for Doug Casey, neither of which are Matt Casey).
Second, you can "junk" an article, you just have to select one star on the rating system ("Poor") directly below the article. This has been in place since I first set foot in here, but likely doesn't get much use.
Finally, you've got a big button called "We aren't Weimar!" that seems to set you off when pushed. Now, without getting into the truth (or not) of that statement, I can tell you that you do your arguments no good by being so reactionary, as it shows you're beyond the point of trying to discuss it calmly, meaning that there is no point in discussing it with you at all. It just creates another area where emotions rule over substance.
IDNJY
Let's see ....
(1) Because it (US dollar default / collapse) hasn't happened YET, it cannot happen? Did you understand the point of the article?
(2) DOUG Casey, a relatively-famous investor, runs Casey's Research; MATT Badiali is his resources expert; JEFF Clark also works for Doug, and wrote the article.
(3) The US dollar WILL default, collapse, lose world reserve currency status, and so forth, on whatever timeline reality chooses. Thermodynamics is based on science and math, and can tell you IF something will happen, but not WHEN; thermo does not address RATES of change. Economics is based on hope, guesses, made-up equations and coincidental observations that seem to have some merit; how can you expect any ECONOMIC prediction to be accurate?
Inasmuch as we spend beyond our means, pile up debts without restraint and refuse to limit our desires, we are EXACTLY like "Third world nations? African, despotic regimes? Revolutionary France? Post WWI Germany?".
You might wish to go back to sleep; when the Crunch comes, at least you'll be well rested.
Dear Truth. The U. S. Dollar has lost one percentage point of its value for each of the last 98 years. I think the trend is pretty well established!
Tuco Benedicto Pacifico Juan Maria Ramirez
Poland 2 mln ZL, 1992
http://bi.gazeta.pl/im/3/8870/z8870833X,2000000-zlotych-sprzed-denominac...
We learn from history that we learn nothing from history.
— George Bernard Shawwhat we don't have direct experience of, is hearsay we decide to accept as "truth" - and "history" is always a story told with agenda.
True. But Shaw’s quote is also true in terms of the big picture. So if this the case, then maybe we shouldn’t be so hard on man and appreciate that this is the way it has always been and always will.
Things are getting better however…CMG makes tasty burritos and we now have up/down arrows to vote with on the internet :-)
At about the time our original 13 states adopted their new
constitution, in the year 1787, Alexander Tyler (a Scottish history
professor at The University of Edinborough) had this to say about "The
Fall of The Athenian Republic" some 2,000 years prior.
"A democracy is always temporary in nature; it simply cannot exist as a
permanent form of government. A democracy will continue to exist up
until the time that voters discover that they can vote themselves
generous gifts from the public treasury. From that moment on, the
majority always votes for the candidates who promise the most benefits
from the public treasury, with the result that every democracy will
finally collapse due to loose fiscal policy, (which is) always
followed by a dictatorship."
"The average age of the worlds greatest civilizations from the
beginning of history, has been about 200 years. During those 200 years,
these nations always progressed through the following sequence:
From Bondage to spiritual faith;
From spiritual faith to great courage;
From courage to liberty;
From liberty to abundance;
From abundance to complacency;
From complacency to apathy;
From apathy to dependence;
From dependence back into bondage."
I want a REPUBLIC, not a DEMOCRACY!
Republic vs Democracy:
http://www.1215.org/lawnotes/lawnotes/repvsdem.htm
I'd take a modified democracy where there is a literacy test and a requirement that all voters spend a certain amount of time listening to a debate on whatever issue they are about to vote on.
We now have the technological means to do this.
Another good alternative would be picking a large (over 1000) number of representatives at random - subject to literacy and critical thinking tests. Make the terms nonrenewable.
That would never work.
Why do you think Obama has an 99% approval rating from blacks?
Serious. Why do you think that is?
bob,
Since he's a Mulatto, seems he would only get 50% of the Black vote.
Really, he got 94% of the black vote in '08, from what I hear his DROP OFF rate is only a mere 10%.
....if it looks like shit, smells like shit, it's shit.
No, no no. My nephew has the perfect "term limits" methodology. Every two years one U. S. Senator and two U. S. Congressman are randomly selected and hung on the U. S. Capitol steps.
Tuco Benedicto Pacifico Juan Maria Ramirez
I would prefer anarcho-capitalism, but then I know what that means.
;-)
Correct. Our founding fathers hated "democracy". They called it "tryanny of the majority".
Tuco Benedicto Pacifico Juan Maria Ramirez
Bob dabolina, I have been drafting a post which says about the same. The FED, bankers and corporate plutocrats are the biggest profiteurs of this whole fiat shit, but they only exist because the population allowed them to exist and because a majority benefitted until a certain point of time from their actions. I thank you and I thank ZH for insights like these.
Die illuminati toilet paper, DIE!
Our currency is backed by hard power of military bases and alliances and thermonuclear weapons. Or in other words, the Madman theory of Kissinger during Vietnam.
Theoretically at least.
That in practice the USA is simply the enforcement arm of oligarchial Diktat spins this differently. Oligarchy does not need US dollars. SDR's are just fine.
You've missed Bulgaria 1997 - http://www.bg-papermoney.com/images/series/41_inflacia/41_inflacia_small...
Bit late to the party. boring. USD demise and world destruction theme is about a decade old. try something different like why Apple, IBM, and US tech companies are going to make oodles of CNY, BRL, etc as tech goods replace $1 Chinese bicycles as the toy of choice.
What a cool collection of notes!
They all imploded from hyperdeflation, but hyperdeflation was not the proximal cause -it was the reactive result.
In economics, when escape velocity is reached, the only way to re-enter is to crash because friction becomes insufficient.
Bit late to the party. boring. USD demise and world destruction theme is about a decade old. try something different like why Apple, IBM, and US tech companies are going to make oodles of CNY, BRL, etc as tech goods replace $1 Chinese bicycles as the toy of choice.
Ha, I see the resealed 10000 Argentinian pesos to 10 Australes. But I don't see what came 6 years later, 10000 Australes = 1 Peso (yes, when the peso was brought back after the collapse of the Austral)
Why is Joe Flynn on the Zaire?
ol' leadbottom!
I just sent this link to my state senator. Great post.
Money is money [gold & silver] and paper is paper - that's all there is to it....
http://www.hark.com/clips/gmbtwdblts-whats-up-doc
I have a binder full of these failed currencies. Also of note: Brazil has intentionally hyperinflated its currency 3 x in the past 30 years. Its a way of forced transferance of material wealth into the hands of debtors, since a fixed figure loan can be paid off with coke bottles later. The bigger the debtor the bigger the windfall.
Was in an airport once recently saw two Brazilian business men and said "hi". Mentioned their currency and they pretty much turned and walked away...I guess they are are disgusted with it all.
The reality is that Brazilians have learned from their mistakes and their currency and economy is in much better shape than most...If reals were freely traded, they would already be worth more than usd.
Hmm, not sure about some of this piece. Regrettably it highlights the issue with ZH, which is that it can be equally partie prise as the other websites it decries.
Whilst the Keynesian model advocated running a fiscal deficit during a recession to stimulate the economy, nowhere does it advocate running a clearly unsustainable, bankrupting deficit, or the seemingly uncontrolled printing of money which if anything is reminiscent of Friedman's helicopter drop - the latter being a monetarist of course.
By the way, the Turkish Lira still exists though it was re-denominated, granted.
This article is Exhibit A as to what happens when one takes a properly reasoned position to an absurd extreme, in order to attempt to prop up that which needs no propping up (the properly reasoned position).
Casey lumps banana republic and revolutionary-time/affected currencies in with the USD, in order to apparently bolster the case that gold has historically treated mankind fairly well when held as storehouse of purchasing power when measured against any fiat.
People know that gold provides shelter from volatility and loss of purchasing power.
The USD was lower than it is now on a relative basis back in 1980-1981.
I am a mortal enemy of the Bernank & Federal Reserve 'Bank' (it's not a bank, it's a privately held loan sharking institution), but even I will concede that in a fractional reserve banking system, monetary policy can be used (as it was in 1980-1981) to suck up massive amounts of liquidity from all recesses, and literally turn fiat dynamics around 180 degrees in very short order.
Why would Bernank (or his successor) do that? We saw and will see again the anger stoked by high and higher gasoline, energy and food prices.
At some point, politics takes over even at the 'insulated from political pressures so as to be able to carry out its mandate' Federal Reserve, and they would drop the reverse repo neutron bomb, because the alternative would be to have about 40 more senators and 150 more House Members talking just like Ron Paul regarding the evils of the Federal Reserve (and rightfully so).
Look at a chart of the last time we had stagflation to a very significant degree, and what happened to the dollar and interest rates thereafter.
If the Dow goes to 30k the average Mope will think its just business as usual if their wet skinny yaks milk latte costs 500 bucks. The willfully ignorant are boiling and dont even know it. Bring on the forest fire.
I'm waiting for next August before calling out Gonzo on his hyperinflation call.
Is that fair?
Or should I give him more time, and if so, how much longer?
I thought he said we'd start seeing it by last March.
All you need to do is wait until September, if the past is any indication. The hyperinflationists have started hollering every September for the past two years, only to go embarrassingly quiet later on.
I expect them to resurface with a lot of noise and cage rattling again in September, after Jackson Hole.
I have a Zimbabwe note of 50 trillion.
I keep it with my gold Philharmonics just to keep things in perspective.
What is the average length of time in the transition to hyperinflation? Months? Years?
The chart below will tell you how fast it happens, IE: almost overnight.You wake up one morning to find everything had doubled in price.
Soon you want to be paid twice a day and you take off at lunch to buy stuff because the prices will change hourly.
http://upload.wikimedia.org/wikipedia/commons/8/8f/GermanyHyperChart.jpg
Zimbabwe chart..
http://en.wikipedia.org/wiki/File:ZWDvUSDchart.png
Looks like on average peaks within 5 years (comparing Germany, Zimbabwe).
Looks like things leveled out before inflation really took off.
http://www.shadowstats.com/alternate_data/inflation-charts
Try this on for size:
https://lh4.googleusercontent.com/-2lMmIytt1SU/TjCZ4VGa_mI/AAAAAAAAAdM/z...
To be fair, there are some caveats to this- I just overlaid the Weimar gold chart on the current monthly gold chart. Notably, the Weimar chart is in log scale, whereas the monthly chart is 1:1. Also, when laying it over, I had the luxury of simply fitting the curve by sliding the upper layer around.
It's illustrative only- to demonstrate the possible parabolic trajectory. Of special note is that the "knee" of the curve on the current monthly gold chart is not as deep as the one on the Weimar chart, which I'm interpreting as there being a little more time before we actually fit the Weimar graph.
Anyhow, it's something to consider. Not a perfect comparison, but best I could do in five minutes.
I feel bad for the people who have their faces on these failed currencies for all time. Is that Tesla on the Yugoslavian bill?
Yes. From wiki:
In 1900, Morgan financed inventor Nikola Tesla and his Wardenclyffe Tower with $150,000 for experiments in transmitting energy. However, in 1903, when the tower structure was near completion, it was still not yet functional due to last-minute design changes that introduced an unintentional defect. When Morgan wanted to know "Where can I put the meter?" Tesla had no answer. By July 1904, Morgan (and the other investors) finally decided they would not provide any additional financing. Morgan also advised other investors to avoid the project.
Of course. The Morgue. Can't collect from the metered usage, not interested. And instead of giving it a rest and leaving it to other investors, Morgan "advised" others to stay away.
It's the Morgans of the world that need to be restrained, locked up and declared as unfit.
Yep. Good catch.
The dude on the Brazilian note got his face melted off in Raiders of the Lost Ark.
The dude on the Brazilian note got his face melted off in Raiders of the Lost Ark.
>British pound ... Canada, Australia, New Zealand, Saudi, Egypt
Canada and Saudi don't have a noticeable budget deficit, and are backed by heavy exports of natural resources. Australia, Britain and New Zealand have some problems currently, but all devalued in 2008-09, are currently taking political measures to control the deficit - however it is not obvious how this is going to end as all three are part of the global neo-Keynesian experiment. Egypt I don't know enough about.
Interestingly, Keynesianism didn't go so well for Britain the first time around. Britain left the gold standard in 1931 and applied Keynesian policies from 1939 to 1979. It ended in a period of very high inflation in the 1970s - annual inflation was 25% in 1975 - and an IMF intervention in Britain in 1976. Things were only saved by Margaret Thatcher. I'm not saying nothing good came out of all that economic misery: it fostered the birth of punk, for one thing.
When I bought my gold and silver, they included a trillion dollar bill from Zimbawe
Zaire reached 1 000 000 in 1992 and then they started with a new currency. Four years later, in 1996, they had reached the million mark again.
Yugoslavia reached 500 billion
Bosnia 10 billion
1 000 000 reached by Argentina, Peru, Nicaragua, Turkey, Poland, Hungary, Ukraine,
Brazil 100 000
Hello everyone,
Slap me silly and call me Sally if I come off as ignorant but -
If our currency collapses, any reason why we WON'T end up like Germany - (from what I understand Germany recovered from it's hyperinflatory state into the powerhouse economy it is today)
I know one thing they have on us is strong exports; manufacturing machinery and luxury goods.
Sure, there will be a time of turmoil but is the Economic Doomsday All-Out "Armageddon" scenario really likely?
I don't buy into the whole Armegeddon scenario myself. This country survived the Great Depression and WW2 for Pete's sake. Countries rise and countries fall. Granted the collapse of the US will probably rival one of the largest in history (maybe comparable to the Roman Empire) but I don't think all out chaos will ensue.
You are making a big bet there. If you are correct, fine. If not, you may be dead!
Tuco Benedicto Pacifico Juan Maria Ramirez
9 Germany ended up like the Germany we see today is, because they kicked the jews out.
Germany ended up like the Germany we see today is, because they kicked the jews out.
If it were true that a small group of individuals had the ability to control large financial markets, like you believe "the jews" to have the magical ability to, then most of the aforementioned countries' currencies would have been saved. Yet that did not happen, and the reason could not be any more clear: institutions made of a small group of men will never be able to predetermine economic results, regardless of their resources and the tools they try to employ. Hopefully the US currency will not experience the same level of poverity as displayed in your thoughts.
I think they more than "kicked them out".
Tuco Benedicto Pacifico Juan Maria Ramirez
Consider a (US) gallon of gasoline is .13-.14 cents including taxes if paid in pre 65 dimes, quarters, fifty cent or coin dollar. Even back in the days when Mustangs were introduced, gasoline was .35 cents, and that included lead!
Who needs a Rumplestiltskin when we got our very own fed? These guys are Magic!
USDX testing resistance just above 74...likely another drop to 73 support...and for technical fans looks like a nice trip top...greatest show on earth
How many of the above currencies did the Rothschilds stand behind?
How many of the above currencies did the Rothschilds stand behind?
Not a single currency Casey lists was a reserve currency, and furthermore, I'd wager (just for shits and giggles) that not a single nation with respect to any of the above currencies had an economy that was larger than 7% of what the U.S. economy is today, in terms of EITHER consumption or production, in real terms.
Won't the fact that dollar is the reserve currency prevent hyperinflation? If the dollar falls hard, then the price of oil will shoot up to $200+, but the global economy will crash once oil hits a certain threshold will it not? Also, how can we have hyperinflation if wages aren't rising. How can prices rise if no one has the ability to pay for anything???
"How can prices rise if no one has the ability to pay for anything???"
Ask Zimbabwe.
HI is catalyzed by the panic created when those who have first access to newly created debt-money convert it into tangible assets. At the end of the chain is J6P and his CC transaction trying to chase escalating prices. HI are the giants yelling 'fire' in our crowded theatre, as they lock the doors from the outside..
The U.S. having reserve status won't prevent anything, it has only postponed the inevitable. Yes, global crash. Other nations already making arrangements to pay for oil by other means.
All things [symbolic], fail, by definition.
READ MY LIPS...SCREW HISTORY. I NEVER READ IT OR BELIEVE IT...!!!
THE USA CAN NOT DEFAULT.WE ARE SPECIAL. THE US DOLLAR WILL ALWAYS BE THE WORLDS CURRENCY.....!
TO THINK OTHERWISE IS TANTAMOUNT TO TERRORISM!
IF...AND I SAY IF WE HAVE A PROBLEM IT WILL BE 50 YEARS OUT AND OUR GRAND CHILDRENS PROBLEM!
WE CAN ALWAYS JUST PRINT AS MUCH MONEY AS WE LIKE AND EVERYONE WILL TAKE IT AND SHUT UP OR WE WILL INVADE YOUR ASS...!
The sad thing is that all the currencies on this list were replaced by another worthless fiat currency. Print foreva bitchez!
Those are great pictures of 0 money. I wonder when The Bernank blames the slowdown on the locust plague. Gotta have a plague to be in style.
Have to admit those are pretty colors.
Fiat Graveyard!!!
Poland 2,000,000 zlotys, 1993
http://1.bp.blogspot.com/_1NTX4exRywE/TQ-ISqqxm_I/AAAAAAAABTE/kFPQeCXjWP...
The list is a lot longer if you count the currencies that revalued at 1000 to 1 or more. Russia has revalued a few times in the last few decades, as has Mexico.
This is a minor quibble, but as a silver bug I am kind of tired of SO many articles saying gold is the only true currency or some such. (I know they just leave it at gold to make their tag line pithy). Silver works just as well, and Palladium, Platinum will probably be precious metals going forward as well. There are many other ways to store value - most others just don't travel as well.
I miss the Italian 500 thousand lira note... for once that we excelled in something... :)
http://it.wikipedia.org/wiki/File:Lire_500000_(Raffaello_Sanzio).JPG
And I think they just stepped in in the last 12 hours on the US Dollar.
They've reversed basically the entire 1% drop in the last two days.
The guy on Turkey's 5 Million Lira note, looks like Dr. Smith from "Lost In Space"....spooky.
I knew I recognized that face. It was bugging the crap out of me. Thanks.
Forgot the Idiocracy Dollar
http://dearjesus.files.wordpress.com/2008/08/idiocracy_money.jpg?w=300&h=163
Is this what Huntington meant when he wrote about the fall of Western Civilization, death by credit?
I r o n y .
How can one say that total debt is 400% of GDP and not offer any explanation o what they mean by "total debt?"
The US GDP is roughly 14.5 trillion and the National debt is roughly 14.3 trillion. How does that equal 400%?
If you are going to add in FNM and FRE mortgages and Muni debt then you are changing the metric upon which you are measuring. The FNM and FRE are backed by assets whether you view those assests as worthless or not. Muni's are capable of issuing some level of taxation and can certainly sell assets like roads and bridges.
I would love to know how the 400% number came about.
www.usdebtclock.org
Total debt is about $55Trillion. This includes government and non-governmental debt. Divide GDP into it and you have about 400%. The Total Debt has been trending down--deleveraging. Government is running large deficits to prop up PRIVATE DEBT. It is the collapse of PRIVATE DEBT that caused GFC. The FED gave $16T in emergency loans to keep the financial system from collapsing. Nothing is fixed: PRIVATE DEBT will collapse. Collapse of PRIVATE DEBT can save the Dollar. Too funny, but, true.
I just came home from the mall, where I went for a late lunch. I have never seen the place so packed or had such a hard time finding a parking space. Tomorrow will be a similar story . . . and the next day . . . and the next day, I'm pretty sure.
People are not going to stop transacting business in dollars even if the entire system fails. Some arbitrary value will be assigned to dollars in existence, and life will go on . . . . 300 million people are not going to stop living and commerce will continue (yes, in dollars) even after the central system fails.
Finite commodities with infinite printing equals serious loss of faith.
Economy continues because people will always need to eat, drink, sleep and shit.
But.. keep an eye on the prices in the food court. You might see a) higher prices and changing more frequently and b) smaller portions.
Also, you're maybe underestimating the effects of hyperinflation on the mainstream.
Spend what you have today, for tomorrow it will be worth less if not completely worthless.
Came across this interesting article on hyperinflation in Weimer Republic with anecdotes from the survivors:
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/790943...
I think Bernabke would love a larger currency but knows that would be the end game.
I visited Cambodia in the early 1990s and a market had 1" stacks of very high quality bank notes, I believe printed in Germany, for sale for almost nothing. Later went to Vietnam, and at that time you had to carry a paper sack full of notes if you went out to dinner, and counting it all out to pay the bill took several minutes. Since then I never assumed paper currency would be worth anything.
Where is the Dodd-Frank note?
Or maybe Frank 'goes in first' as in the Frank-Dodd note?
.
movment of military vehicles in conus?
http://theintelhub.com/2011/06/20/military-equipment-positioning-no-fly-...
http://www.youtube.com/watch?v=PSA6rc4W_wg
http://www.youtube.com/watch?v=kJ3TKLhEcFE
http://www.bobtuskin.com/2011/07/24/pentagon-to-deploy-20000-troops-in-c...
deployment of troops conus?
what are you doing on wise government?
As you said previously.. So which is it? Suspicious or SOP?
...a thousand worthless point's of light for all my Bohemian friends. Throw up the political baby and kiss it, then throw that generation upon the flaming alter.
...talk about the mark of the beast with the (the graven image of a man on the debt note) image, name and number which defines corruption and the fulfillment of the prophetic strong delusion, which is all wrapped up as one voice of contempt sealed by all the people that accept the mark of the beast.
lol ...listening to Dick Bove (he just said the ''the sky is fallin) right now on cnbc as I type this, and he's saying the exact same thing about escaping the debt/dollar. What people don't get though, is this time the destruction is of a global nature ...of biblical proportions. http://www.youtube.com/watch?v=6MRLoqIxr3o&feature=fvst
RE...Living IN and THROUGH Nicaragua's Hyperinflation of the late 1980's:
Prices would sometimes double from the morning to the afternoon. Most everything was out of reach for the vast majority of the population. Those who held U.S. dollars lived like kings since the average MONTHLY wage was under $10...that's right -->ten dollars a month.
Money ITSELF was the biggest shortage....they just couldn't IMPORT the printed money fast enough to keep up so "pay packets" would include IOU's and all manner of "negotiable" pieces of paper. No matter what, you would run out and spend it as fast as you could (on food) because it would loose it's purchasing power as you waited in line. Edible food was far more valuable than money. Beans, rice, etc were like gold. One single bottle of local beer was equivalent to my weekly salary (US$ 2 / week for teaching school full time.) Price rises would be on the order of this: bus fares (if you could GET ON a bus) rose from C$100 (one hundred córdobas) to C$5000(five THOUSAND córdobas) from one day to the next. Very quickly, nothing surprises you and you just shrug and curse under your breath (or loudly in many cases) and try to ignore the hunger pangs in your stomach, and the darkness on the streets as infrastructure collapses quickly.
GROWTH INDUSTRY was ZERO's. That's right; the number ZERO was the fastest growing part of the economy. As we walked to work (the few buses that ran were loaded 300%-400% capacity) I would point to trucks which I claimed were carrying full loads of ZEROs out to the stores to add to the price of everything. The numbers just got longer and longer until it became comical.
THEN CAME "CURRENCY REFORM." This meant you stood in a 5-hour line at the bank to turn in your old currency for a "receipt." Several days later another 5-hour line when you would retrieve "revalued currency" which was the same paper stuff, but which in the interim had been stamped with magic symbols and had holes punched in it. This meant that three or six ZEROs had been lopped off (and returned to the Warehouses for recycling...which happened VERY fast.) Before you knew it the "reformed prices" were right back where they had been.
It is very dis-spiriting but I can tell you it totally clarifies the value of FIAT CURRENCY as being nothing more than colored pieces of paper. I have long maintained that the only thing holding the "American Union" together is the American Dollar so we can all see where this seems to all lead. It really does radicalize people very quickly and any "faith in the system" held by the population evaporates with each round of price increases.
Now before you go slamming the Nicaraguan Commies for ruining the economy, please understand that the hyperinflation was purposely instigated by US aggression (mining of Nicaraguan harbors, untold "dirty tricks" in ruining infrastructure....water and sewage treatment, highway bridges, etc. etc. etc.) and caused unimaginable suffering amongst the the hard-working Nicaraguan people. [This was all sold to clueless North Americans as "necessary for National Security" because the second-poorest nation in the hemisphere, populated by fewer than five million people, the majority of whom were severely malnourished and barely able to read or write, somehow posed a looming threat to U.S. hegemony.]
Fun Fact: In 1980, the Zimbabwe dollar was worth more than the US Dolllar. (ZWD 1 = USD 1.47)
To tell the truth, I have more confidence in Tea Party whack-jobs duking it out with spineless weasel Democrats than I do with the fake 'efficiency' of the Lying Sacks of Shit Chinese and their completely fraudulent '9% growth'.
Compared to the mendacious and diabilical Japanese governent, ours is one of angels and saints. Our school children are not put in the way of radiation so that utility company executives can save face.
Congress has along way to go before it becomes outrageously disfunctional: see Charles Sumner v. Preston Brooks.
China has enjoyed 10% plus growth ..what's Americas faked single digit number?
if you think our politicians are any less detructive than Chinas or Japans then you're dreaming.. they haven't got 3 illegal foreign wars going on the boiler have they?
when people read history they always think they'd have stood up to Hitler et al when he sent booted buffoons to wead out people they didnt want, shutter businesses or the last straw, invaded Poland
'Wakey Wakey" that's exactly what the US is up to right now.. 3 Polands happening right under your zombie noses, shuttering all sorts of businesses under all sorts of totalitarian Laws with only the local goon squads amiss which Obumma has already called for to add to the Homeland Security fascists pestering free movement and the State Police bully boys robbing everyone with petty fines
Has anyone stood up yet and called "enough"?
Nope. None of us would have done fuk-all living in Hitlers Germany stop kidding yourself you've got a working brain or a backbone.. just as we are doing zippo now amongst this financial and totalitarian vandalism of free markets and a free society. We are living in 1984 and we're such a bunch of f'n zombies we don't even realise it's arrived, its HERE
You've got to keep reporting your private financial matters to the US IRS for 10 years after you've left your country and changed your citizenship ..."Land of the Free" my fuking arse
Cattleya labiata ...
this is a great time to be in debt. i just bought a half million dollar home for no money down(who said it couldn't be done) my credit cards are maxed out(bought pms) and now i sit and wait for .gov to make me debt free for pennies on the dollar. i love fiat dollars.
HEY OBAMA AND DEMOCRATS
WHY DONT YOU HELP PAY OFF THE NATIONAL DEBT WITH YOUR OWN MONEY
RIGHT HERE BITCHEZ
https://www.pay.gov/paygov/forms/formInstance.html?agencyFormId=23779454
PUT YOUR WEALTH WHERE YOUR MOUTH IS
STOP STEALING FROM ME!!!!!!
Some scary shit this article
Everything Govt (monopolies) touches turn to crap... the reason for the failures is monopoly money systems always run out of control ...failures in a free market of money would happen but because there'd be alternatives (competition provides choices to go to) the failures would be much smaller and much less damaging to the citizens and the businesses within the nation..
..as it stands our Western Govts, monopolists of so much, will rob and rape the country to bailout their skins for as long as possible and drag the entire country down the sewer with them ...the State takes chunks out of you, the free market can only take what you decide to put in
..currency crashes would also be over much sooner because the market reacts many times faster than Govt to take out the garbage... suffering this slow-mo train wreck with those twats Benny and Trichet and the cackling posturing morons of Washington, Westminster and Brussels is almost more insufferable than the currency collapse itself ...Bring It On
I believe this lull before the (shit)storm will last about one more year. Then the bottom will drop out out of the dollar.
It won't be anything the Fed does. It will be actions of other nations that cause confidence in the US dollar to collapse.
The most likely event is announcement that SCO-alliance nations have succeded in getting completely off the US dollar.
Since Russia, China, and India are the three biggest SCO alliance members, each with large nuclear arsenals, plus Pakistan's nukes, other SCO alliance nations (like Iran) will be fairly well protected from US military retaliation when they drop the US dollar.
By then I fully expect OPEC nations to join the alliance and drop the US dollar.
Muslum nations will also join the alliance out of sheer hatred of America, the "great satan" in their view.
At that point the middle east will be mostly SCO alliance. America will be kicked out of Iraq and Afghanistan, losing control of Iraqi oil.
America won't dare attack Iran either. With Iran supplying 25% of China's oil, attacking Iran would be attacking China and the SCO alliance in general. It would bring catastropic consequences on America. If Israel acting in proxy for America (foolishly) attacks Iran, Israel will be turned to glass.
With major oil producing nations in the SCO alliance, off the US dollar, confidence in the dollar starts collapsing around the world as America grinds to a halt from major loss of oil imports.
This is just one possible scenario. But a very possible one, one our (pirate) leaders belive will happen I suspect, which would explain their urgency to loot what they can from the American people ...exactly what we see happening right now.
I'd like to point out that the Greek currency featured here was actually issued by Germans. The more things change...
Look at it this way... Paper money is needed for PRACTICALITY. Paying for a McDouble with gold would be slightly awkward. Not to mention getting 'change' back.
But a gold-backed currency makes a lot of sense. X-denomination = 1oz of gold. People could openly exchange 1 for the other for a small transaction fee. A big run on gold would lead to less gold available and then the currency would strengthen accordingly. Such a currency would never lose 95% of it's value.
2 sides to every trade though, right? So didn't *someone* gain 95% on the falling dollar?
I guess we will see 500 and 1,000 $ bills in circulation again soon.
Do you think they already have the printing plates cut for these?
and who do you think will be on the 5k, and 10K notes?
.
Pretty money.
My gold dealer delighted in sending me $100 000,000,000,000 Zimbabwe notes delivered along with gold purchases. Still have 'em.
One currency that's missing is the French Franc (you don't have to go back to the 18th century for this). I remember that in the '60s, there were "old francs" and francs in the currency. I was an army brat - and there were 50 franc coins being used as 50 cent(imes) coins at the time. That was a 100 to 1 currency exchange.
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"Paper money eventually returns to its intrinsic value: zero." -- Voltaire
The myopia of Gold Bugs knows no bounds...
Really?
Hmmm.
Perhaps some of the commenters here on ZH could post about any of the many gold-backed currencies that have lasted forever and that did not eventually fail.
"History has a message for us: No currency of any sort has lasted forever. Eventually, they all fail."
Idiots.
Obamamoney ;)
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