Quote:
Originally Posted by Ferd
I simply dont think a gold standard economy is viable with the scale we have today.
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Yes sir... and I agree with this.
That is actually much of my point.
What we have is an economy built on debt. A fiat economy built on debt can run like wildfire until the chickens come home to roost...
I hear the clucking and the crowing louder every day.
It is as if your family had been operating for years without going beyond your income. You only spent what you had.
Then.. you began to live debt based... meaning you had access to loans and credit cards with nearly no limit. Life is now good.... your "economy" is flourishing.
Somebody keeps telling you that you just can't keep living off of debt and one day it is all going to cause a big financial collapse.
You faithfully reply to them... "Well... looking back on our families economy I can remember no worse times than those when we lived within the confines of our income."
This is the basic discussion we are having.
I cannot, for a moments time, deny that we would not have the economy we have now had it not been based on debt and were it "held down" by our true wealth.
But we cannot, for a moments time, think that we can continue to live on debt, after debt, after more debt, after more debt and this house of cards never collapse.
The family in the discussion above is living it good. Then tight times come... because they can no longer pay the minimum payments... then they borrow money to pay the minimum payments... then the bankers "trust" goes away.
All the worth they possessed was the trust the bankers had in them.
Then... no one else will lend...
Then the collapse begins because their "lifestyle" was not a picture of their true wealth but only a picture of the trust lenders had in their "economy".
When the trust goes the debt goes and when the debt goes reality pays one long, hard & unrelenting visit.
So those pre fiat economy hard times... they were adjustment cycles... reality checks... realizations that we had spent beyond our wealth.
A debt based economy has made us free from such cycles and reality checks.
But when this chicken comes home to roost... it will own the place... and it will be one big, bad, ugly, mean, mad & hungry chicken.
All of those missed cycles will come down... all at once... in spades...
Because we left the concept of living within our means decades ago.