Quote:
Originally Posted by *AQuietPlace*
Okay, but I'll confess to being a total dummy in this area. So what does that MEAN?
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AQP, look at it this way.
We have a fiat economy. What that means is the actual value of the dollar bills you carry is based on the perceived value of the American economy as a whole.
Now when the American economy dominates the world, that dollar buys a whole lot of stuff. It does so because everyone wants it. where their economies are unstable ours is stable and thus the reason they want our dollars.
Now consider the value of anything is based on how many people want it, vs how many of the objects there are available.
If you are the only apple farmer in the world and you produce a very tasty fruit, the whole world wants your apples and you can simply "sell to the highest bidder". people with lots to offer you get apples while those with nothing eat pears.
Now if somehow, some folk learn how to grow apples and their apples taste as good as yours then there are now more people with apples to sell, there are more apples and now, there are more bidders that can win apples.
Your apples lost value because there are more apples out there....BUT
What if instead of more apples being out there, the pear farmers figure out that if they can get people to hate apples, then more people will want pears?
Let’s say for some reason that apples start making people really really sick. Now nobody wants your apples. You may have the only apples on the world but if nobody wants your apples they have no value.
The American economy is seeing both of these things happen. Other nations like China and Europe have stable and valuable currency. some people want theirs now to go with ours.... that makes ours less valuable because the market place now has options (more apples from other growers)
At the same time, our economy is NOT stable and our government policy is making it less stable. That means fewer people want our currency. The value of our dollars has dropped because fewer people want to take our dollars for their goods…..
That is called inflation. All the sudden now instead of a dollar to buy bread, it takes more dollars, not because bread is more valuable but because the dollar is less valuable.
Your question was how bad. Consider history. In Germany, before WW2 it got to the point that bread cost $50,000 marks… Then in desperation the people turned to a charismatic figure who told them he had a plan to get them out of the economic mess.
That man was Hitler. Desperate people will do anything to feed their kids. They will even elect a Hitler. And march off to war and commit unspeakable horror.
I don’t mean to be beyond the pale here, but the answer to “how bad can it get” can only be answered with “How bad has it gotten before”?
That answer is pretty scary.
for your heavenly Father knoweth that ye have need of all these things.
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