While this story is a year old already, Why the global financial system is about to collapse remains scarily accurate in its analysis of the problems faced by fiat money systems around the world.
The global financial system is about to collapse because the US dollar is about to collapse. The US dollar is about to collapse because of a simple economic fact that no one has the power to change or conceal. The fact is that the spontaneous remonetization of the precious metals is a Nash equilibrium.Why the global financial system is about to collapse
I don’t know who John Law is, but he made some interesting points. Good luck finding him if you have questions for him. I questioned the insistence that gold (or any commodity) could serve as a stand-in for money, questioned it at the time, but I temporarily gave a home to the text he generated because I thought it worth discussing. 2019. That time has passed. I removed the text he generated from this blog entry aside from the snippet. Follow the link if you want to read the rest of the article.
I’m no longer convinced that John Law understood economics better than I did at the time, and I’ve learned a lot more about economics in the decade since stumbling across that article. People like the idea of gold as money, but they aren’t willing to carry the stuff around in order to trade with it, and they don’t seem inclined to pay the full costs of maintaining all the systems and the costs of maintaining reserves simply to protect against the debasement of their currency.
Humankind needs to come to some new understandings about what money is and why we need it, but I don’t see a return to gold anywhere in the cards. It just isn’t practical to have huge troves of precious metals sitting around gathering dust in treasuries around the world. This is especially true when electronic systems could be created that could do the same job without taking up the real estate doing it.
No, I’m not talking about cryptocurrencies, at least not any of them that currently exist. We’ll just have to see what happens next. In the meantime I may drag out a few more snippets as examples to rebut in a future piece that I will be writing about the subject of money.