Something to think about.
Something to think about.
“If you don’t know the game and the rules that we’re playing by, you’re gonna get slaughtered!”
Presenting to an investors conference recently in Puerto Rico, Michael Maloney shares his perspective on today’s global economy and how to get ready for the greatest wealth transfer in history.
“I believe there’s going to be deflation first, and then, all of the world’s central banks will start printing like crazy to get us out of that deflation, and [U.S. Federal Reserve Chair] Ben Bernanke will be leading the charge.
The signs are clear, Mike continues:
•The Fed buying up the U.S.’s own bonds from the Treasury, or Quantitative Easing. “That means there’s an emergency going on,” Mike says.
•“You can’t have a debt that is 10 times the size of your economy.”
•“The world’s stock markets and real estate bubbles have to continue crashing because all it is, is the market trying to seek fair value. It’s trying to seek equilibrium; this is what markets do. It’s their job.”
•“Our entire currency system—it’s imaginary. It doesn’t’ really exist; it’s just that we’re all dreaming the same dream. If anybody chooses to wake up, it’s over with.”
“Here’s one thing people do not realize,” Mike says. “It does not take Ben Bernanke to print the dollar into oblivion for gold to go to $10,000, $50,000, $100,000 an ounce. All it takes are a few wealthy investors to try to get theirs for the masses to wake up, before the masses wake up, and the herd comes charging in.”
Why the greatest wealth transfer in history? Because, Mike explains, throughout history, each time the monetary system has changed (as it always does), gold has always risen in price to account for all the currency in circulation. Today, that volume of currency is enormous and growing.
People do not realize the scope of the coming wealth transfer, he continues: “If we have to go back to some asset-backed currency, the people holding non-asset backed currency, their wealth is transferred to the holders of precious metals….”
Just don’t wait until the rest of the world wakes up to what is happening, Mike warns—because by then, it will be too late!
Tuesday, August 2, 2011
The Average Life Expectancy For A Fiat Currency Is 27 Years ... Every 30 To 40 Years The Reigning Monetary System Fails And Has To Be Retooled
David Galland notes:
Monetary scholar Edwin Vieira ... pointed out that every 30 to 40 years the reigning monetary system fails and has to be retooled. The last time around for the U.S. was in 1971, when Nixon cancelled the convertibility of dollars into gold. Remarkably, the world bought into the unbacked dollar as its reserve currency, but only because that was the path of least resistance. But here we are 40 years later, and it is clear to anyone paying attention that the monetary system is irretrievably broken and will fail.
What will replace it is still unclear, but I suspect that when the stuff really hits the fan and inflation rages the government will try the approach taken by the Germans to end their hyperinflation back in the 1920s, coming up with the equivalent of the Rentenmark – a dollar that is loosely linked to some basket of commodities and financial instruments. It won’t be convertible, because it would be impossible for bank tellers to exchange your dollar for a cup of oil, and a coupon off of a bond, and a chip of gold, or whatever makes up the basket – but it might restore some semblance of confidence in the currency. That’s one option. Another is that some government decides to make its currency convertible into precious metals; but that will only happen when all other less fiscally restraining systems have been floated and failed. Simply, at this point we can’t know what will replace the current monetary system, or when. All we can know is that the status quo cannot and so will not survive this crisis.
Regardless, between now and the point in time where the Fed throws in the towel on today’s fiat monetary system, you would have to be naïve in the extreme not to expect volatility, uncertainty, and wholesale financial dislocations.
Chris Mack writes:
According to a study of 775 fiat currencies by DollarDaze.org, there is no historical precedence for a fiat currency that has succeeded in holding its value. Twenty percent failed through hyperinflation, 21% were destroyed by war, 12% destroyed by independence, 24% were monetarily reformed, and 23% are still in circulation approaching one of the other outcomes.
The average life expectancy for a fiat currency is 27 years, with the shortest life span being one month. Founded in 1694, the British pound Sterling is the oldest fiat currency in existence. At a ripe old age of 317 years it must be considered a highly successful fiat currency. However, success is relative. The British pound was defined as 12 ounces of silver, so it's worth less than 1/200 or 0.5% of its original value. In other words, the most successful long standing currency in existence has lost 99.5% of its value.
Given the undeniable track record of currencies, it is clear that on a long enough timeline the survival rate of all fiat currencies drops to zero.
And Jeff Clark points out:
History has a message for us: No fiat currency has lasted forever. Eventually, they all fail.
BMG BullionBars recently published a poster featuring pictures of numerous currencies that have gone bust. Some got there quickly, while others took a century or more. Regardless of how long it took, though, the seductive temptations allowed under a fiat monetary system eventually caught up with these governments, and their currencies went poof!
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.
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.
So what’s the one word for the “thousand pictures” below? Worthless.
If you want to live in fear; here is a good reason.