Paper Money
I recently finished reading Empire of Debt by Bill Bonner and Addison Wiggin.
I enjoyed this read, not only because of all the history, but because it was an easy read for me. This book will not put you to sleep with a lot of technical statistics, and pie/bar chart data. It really speaks to a layman, like myself, about how much in trouble the United States economy is really in.
One of the passages in the book that has stuck with me is this one:
“America’s impoverishment is even more ridiculous. She is sustained by foreign wealth, but without real money. It is merely paper money without the paper—electronic registration units of paper money. It is a mirage—a chimeric representation of something that doesn’t exist anywhere. For every additional dollar the US Treasury calls into being, there is no extra dollar of savings, no extra dollar of profit, not even the paper dollar itself. At least the gold taken from Latin America is still around today and is still useable. The dollars created by the [US] Treasury are likely to disappear altogether.“
Makes me think, what will happen to those nations, like China, who have been buying treasury bills and becoming the “Real Bank of America,” if the majority of those foreign nations lose faith in the US dollar? I don’t think this is a problem that could hit just the United States of America, it sounds to me like an economic global crisis when it does happen.
Also, just think about the amount of inflation being caused by the above machinations of the US Treasury; the erosion in value of the US dollar.
After reading this book I understand a lot more about the reasons we live in a perpetual rat race, thanks to our very government and the artificial economy created. According to Bill Bonner and Addison Wiggin, a US dollar today, in comparison to one in 1913, is worth five cents.
I really do recommend this book.
Sounds like an interesting read - I’ve always been fascinated with the idea of money that is purely “electrical” and never existed in paper form. I’ll add it to my reading list!
Want to see an interesting concept about money, check out the video Money as Debt (http://www.moneyasdebt.net/). I think the problem with the dollar losing value started in the 1980s or even sooner. The US had always made sure to try to keep value of its products and money at a high by balancing the costs of doing foreign trade. Example, if it cost 10 cents to make something in China, and it costs $1 to produce the same thing in the US and the tariff would be 90 cents to keep the value the same. Most companies did not bother doing business outside the US because it was not cost effective. Then the fair trade agreements came in lowering these import taxes to bring in cheap goods from other countries. Another problem is all the exporting of raw materials from the US to other countries, and then the finish products are imported back in at a cost. I think the US dollar is losing value very rapidly because the US does not value the dollar as it used to. Money in a digital form can be created very easily with no actual means to back it up. I’ll have to see if I can find this book though, it sounds neat.
That’s for the link, Jim.
There are a few interesting articles linked to on that website, as well.
It sounds like a very interesting book. I’ll have to check it out.
There is a new video out of Bill Bonner’s speech, given at the Rim of Fire Conference in Vancouver (07/07)…
http://www.youtube.com/watch?v=PZb2iJpUkfg
[...] One of the websites I like to visit often is the Daily Reckoning. These guys are the author of the book Empire Of Debt. A book I recommended on my blog post titled Paper Money. [...]