from Money and Trading:
Sitting on the table next to me is $50,000, 1922 Reichs bank note. The man with his face on the note looks a little grumpy. Maybe it’s his bad haircut, or the goofy hat, or maybe he knows the currency with his face on it is going to be valued as nothing.
What would the person holding this note in 1922 have to share with the people around the world today? Was this one of the Reichs bank notes stacked next to a fireplace to keep a home warm? Did the wheelbarrow this currency was sitting in get stolen, or did it just end up in the street when it was deemed utterly worthless?
This is what the end of fiat currency looks like. At least back then, the money had to physically be printed. “When Money Dies” by Adam Fergusson, gives insight on what an economy goes through when monetary policy is out of control. Today there are trillions of dollars on computers screens. Zeros can be added at warp speed. Most of the currency from the bailouts is still sitting on bank balance sheets. When these dollars start to move into the US economy, prices will start to rise. This may signal the beginning of the end.
In 1792, the death penalty was issued to those who counterfeited money. The founding fathers lived through the collapse of the continental dollar, and did not want their heirs to experience the same problem. When a country debases its money, and goes to a paper currency, the currency always goes to zero. Bill Bonner asked Addison Wiggin to list all of the fiat currencies throughout history, and what happened to each of them. As he got through the letter A and half way through the letter B, Addison discovered the first 600 fiat currencies all went to zero. Fiat currencies going to zero is the norm, not the exception.
Things are good today and will continue to be good for the short term. When economies begin to head south, it’s important the people understand these problems were not caused by government officials, the rich, or capitalism. Undoubtedly, this is where the media will try to place the blame. The real culprit is having a money supply backed by nothing, otherwise known as fiat currency.
Please follow SGT Report on Twitter & help share the message.