Thread: Step by step chronology of world economic failure

Most money in the world today exists as 1s and 0s.

It's value is, as it is perceived to be, the value of the asset it exists in.

A dollar is a dollar and is worth so many euros.

A euro is a euro and is worth so many yen.

A yen is a yen and is worth so much gold... and on and on and on.

The dollar should be... right now... in the tank. Inflation should by running ten times what it is here.

It's not.

The only reason I can think of for this is... it's perceived value in the eyes of the world is still higher than all the rest.

As long as that continues... the dance goes on.

Once that stops... then the earth begins to move... the dollar holds no value, then other things begin to hold less value (see China with their pegged to the dollar yeun)

All other currencies head down as their perceived values also decline. Try as they might, no one has managed to become (like the dollar has been, and remains yet today, the last safe refuge). Not the yen, or the euro, or any other. Each has their own issues...

Gold goes through the roof (2.5k or higher), as the only real asset. Other hard commodities join in the climb, silver of course, platinum, copper, and others.

As in late 2008 the world will hold it's breath and wait... and the politicians and financial bureaucrats will sing and dance... and eventually the market begins again to perceive value in things other than hard assets... and the game begins again... as it must.

1s, 0s... too many 1s and 0s

What's really fucked up is when the dollar tanks, other currencies tank even harder, thus encouraging investment in the dollar which prevents the dollar from collapsing as much as it should, thus preventing change and perpetuating our debt-ridden economy. When wall street fell by 50%, other markets fell by 80% which made investment in wall street seem like a good idea.

On the other hand, what the hell is money? If currency devalues by a factor of 5 or becomes more valuable by a factor of 5, what really changed? Did the earth suddenly get more resources? Did we suddenly stop being able to produce as much? Did we suddenly start being able to produce more? Did people stop needing food, clothing, and shelter?

I suspect the reason the world economy won't collapse is that its so intertwined that basically we're one big village now. If a village used a form of shells for currency and suddenly a storm washed in 10x as many shells of that type, would anyone in the village really suffer or profit on the whole? Or would everything simply start costing 10x as many shells and life would go on as usual...

Originally Posted by Disillusioned_1

On the other hand, what the hell is money?

That's my point... money is 1s and 0s.

Hold any cash?

Hold any gold?

Most people have only what their ATM card will give them... 1s and 0s.

Perceived value... what something is worth is what someone is willing to pay for it... it's really just that simple.

Thus someone that has only a HS education (if that) and can only do simple things... like basic assembly line stuff (put this part on that part and put them back on the conveyor belt) their time, their labor is worth only so much.

Whereas someone that is highly skilled... their time is worth more... as people are willing to pay for for that skill.

Thus we get into all kinds of crap when, in the pursuit of being 'fair' we try and 'level the playing field' This can never last very long. The market is, in the end, too unforgiving.

Great replies !

Now, I wonder in respect to wealth how much of what we consider as value is actually individual perception not attached to obvious life sustaining resources ?

What would each of identified countries be worth in terms of life sustaining renewable resources ?

Could we revalue "each currency" in light of a new adjusted value (based on renewable resources) as a factor and reschedule all debt and transactions world wide ?

The existing ability to make something out of nothing leveraging it out of sight and selling it to unsuspecting fools is tanking us. IMO.

Originally Posted by skeptic1

Great replies !

Now, I wonder in respect to wealth how much of what we consider as value is actually individual perception not attached to obvious life sustaining resources ?

What would each of identified countries be worth in terms of life sustaining renewable resources ?

Could we revalue "each currency" in light of a new adjusted value (based on renewable resources) as a factor and reschedule all debt and transactions world wide ?

The existing ability to make something out of nothing leveraging it out of sight and selling it to unsuspecting fools is tanking us. IMO.

I'm not sure why you would want to do that.

It would be like the break up value of a corporation... the underlying value of the assets you are buying, with the remaining cost of the purchase being 'goodwill'

The existing ability to make something out of nothing leveraging it out of sight and selling it to unsuspecting fools is tanking us. IMO.

The market is not kind. Now... to the extent that fraud would be used, then these people 'making something out of nothing leveraging it out of sight' should be stopped and locked up.

To the extent that the buyers are 'unsuspecting fools' is their problem... don't understand it, don't buy it.

Honestly, I think rampant inflation would actually help the majority of Americans, and the country as a whole.

Why? Because if things started costing 10x or 100x as much, people's wages would go up by 10x or 100x as much, but people's DEBTS, like their Mortgages (or the national debt), are a fixed amount. So if a loaf of bread cost $100 that would suck, but your salary might be $300,000 per year, and your mortgage you took out in the year 2003 would still be $250,000 which is less than a year's wage rather than 10 year's wages.

People who don't have debt but have lots of cash savings would be screwed by rampant inflation. But the Government and the average citizen would probably be better off if inflation skyrocketed. People without debt who own assets (like businesses or rentals or land) would be fine during rampant inflation.

Originally Posted by Disillusioned_1

Honestly, I think rampant inflation would actually help the majority of Americans, and the country as a whole.

i'm looking forward to it... though not in the sense you might think...

Originally Posted by Disillusioned_1

Why? Because if things started costing 10x or 100x as much, people's wages would go up by 10x or 100x as much, but people's DEBTS, like their Mortgages (or the national debt), are a fixed amount. So if a loaf of bread cost $100 that would suck, but your salary might be $300,000 per year, and your mortgage you took out in the year 2003 would still be $250,000 which is less than a year's wage rather than 10 year's wages.

People who don't have debt but have lots of cash savings would be screwed by rampant inflation. But the Government and the average citizen would probably be better off if inflation skyrocketed. People without debt who own assets (like businesses or rentals or land) would be fine during rampant inflation.

It never works like that... you never keep up, let alone 'get ahead'

Inflation is a cruel tax... and it hits the poor the worse.

Originally Posted by tsquare

It never works like that... you never keep up, let alone 'get ahead'

During the French revolution people got ahead. They got lots and lots of heads in fact!

Originally Posted by Disillusioned_1

During the French revolution people got ahead. They got lots and lots of heads in fact!

And I got head last night... but that's not what we were talking about.

it's all in your heads, guys. as long as enough people believe that a piece of paper is worth something more tangible, then we're fine. i don't see that changing any time soon.

Originally Posted by bg85

it's all in your heads, guys. as long as enough people believe that a piece of paper is worth something more tangible, then we're fine. i don't see that changing any time soon.

That's what I said... perceived value.

^i just think you're wrong when you say the dollar "should" be experiencing more inflation. it "should" be inflating at the same rate that it actually is.

the dollar "should" be in the tank only if the world agrees that it's in the tank. since the world agrees that it's not in the tank, it's not in the tank, and that's exactly what "should" be.

Originally Posted by tsquare

And I got head last night... but that's not what we were talking about.

But that didn't solve the country's financial problems. The french revolution solved theirs.