Saturday, October 4, 2008

American Financial Crisis - Fiat Money

What started the latest addition of the American Financial Crisis was, Fiat Money, you know what I'm talking about. Mickey Mouse money. Paper, just stand back a few yards and take a look at the stuff....

Yep, it's just paper, if they did not print so much of this paper maybe it would be worth something.

While were at it, Sit back and take a look around the room you're in at this moment in time. Do you see anything of value that you could sell or trade if you fell on hard times. Your age will dictate what is of value to you. For example, if you are a teenager you may consider your music collection to be of great value. But for this exercises we should overlook our personal preferences and concentrate on items of value and utility. You may collect stamps for example, but what makes a stamp collection valuable ?. Rarity, rarity is what makes a stamp collection valuable. By rare I mean there is very few of them in the world. And there are a lot of people who want them because there are not many of them around. After all you must remember, a stamp is just a piece of paper with a printed image on it. Paper and ink is all it is made of.

Fiat currency is paper and ink that government orders you to accept as payment for goods and services. They have their own banks (central bank) printing this paper money, money that is not backed with anything. All this paper filters through the the economy, causing more paper claims on the limited resources this world has to offer. This drives up prices and causes inflation, that means inflation is caused by the cenral banks.

Politicans and banker live high on the hog, the rest of us must make our living the hard way. I look at the USA and see bankers and politicans trying to tell the people they know best how to get the economy out of the mess it's in. The mess they created trough greed.

But central banks claim they are fighting infation, I look at their actions and think not.

I think you need silver and gold. Your house contents are not mobile, and when you need to flee the nest in hurry, traveling light is a boon.

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Article Source: http://EzineArticles.com/?expert=Thomas_Tobin

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1 Comments:

Anonymous Anonymous said...

not really familiar with this article., i think it's about law and legality.

February 21, 2009 at 7:29 PM  

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