Is the world economy a GIANT PONZI SCHEME? Find out here
 

Source: 24hgold.com/english/contributor.aspx?article=2206582250G10020

http://i46.tinypic.com/5tun0x.jpg

Excerpt:

But after the Vietnam war the US had overstretched its resources and by 1971 Richard Nixon abolished the gold standard in order to be able to start money printing in earnest. The money printing phase is normally the last stage of an empire before it collapses and this is where the US is now. The US dollar became the reserve currency of the world when the US was strong economically. But as the US economy started to weaken in the 1960-70’s the US government found a much better method for maintaining a strong economy. It started to print paper that it sold to other nations or exchanged for goods and services. For almost 50 years this has been the most clever way ever devised of maintaining the living standards of an economically deteriorating nation without even having to spend any resources on building an empire. It is a Ponzi scheme which has worked for several decades but slowly the world is now waking up to the fact that they are holding worthless paper printed by the US Government.

Commentary: Gold bug tinfoil alarmist conspiracy or are they on to something? What are the chances of 70s era STAGFLATION making a comeback?

its not a conspiracy.. any retard can see that this may be a disaster, and alot worse than the 70's.

:upsidedow

What goes up, must come down. I imagine I will live to see the day when we're burning stacks of worthless $100s as firewood.

the real problem is the whole idea of legal tender.

wikipedia: "Legal tender or forced tender is an offered payment that, by law, cannot be refused in settlement of a debt, and have the debt remain in force."

If you allow the government to determine what can be used as money and what cannot, you allow the creation of monopolies with all the problems that naturally follow...

Interesting thread, interesting graph.


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So what are you suggesting here?.
Armageddon ?!?

More like, inevitable anarchy I think.

So if the dollar is going to be worthless, our econamy is going to be trash and the porn business is dead, where are you guys putting your money?

You have a point there. It's a form of FORCED VALUE. Gold, on the other hand, is market-determined. Hard to corner that market. See the Hunt brothers' sad experience with silver.

:1orglaugh:1orglaugh

Literally in the fireplace, like I said. (just ordered a cord of wood today)

Even worse is the fact that the fed is no longer reporting the M3 money so they can print as much as they want and we can't tell how much they have printed. If you look at past fallen civilizations they all have the same pattern and the US is on the tail end of that pattern. High taxes, corruption, and massive printing of currency are some of the tell-tale signs.

BTW, a ponzi scheme is where you take money from people and tell them that you will pay them back with interest later on. Then with money you receive from the new people you pay back the earlier people. Social Security is one example of such a scheme. As long as there are more contributers than people you need to pay back, it works, but unfortunately, such a system can't logically exit in perpetuity.

Abandoning the gold standard is not a Ponzi scheme.

Another factor that contributed to the massive growth of the economy back then was the fractional reserve system. Basically, this allows the banks to print money out of thin air, legally. The way it works is that for every dollar the bank holds in deposits, they are allowed to loan out to others several times more. Just how much more is dependent on the currency regulations. They don't need to actually have the money to loan out, they just invent the money. This causes an increase in the money supply and thus inflation. Once those loans are paid back, the deposits increase by that much more and so the banks can loan out even more.

Compared to a fixed currency that is backed by some kind of scarce resource, the fractional reserve system can cause a massive spike in standard of living for a temporary time. This banking system allowed the US to become the superpower it became. Unfortunately, it comes at the cost of massive debt as well, and when the debt becomes too much of a burden it can cripple an economy. This is what the US is seeing right now.

The other thing to note is that the Federal Reserve is not actually Federal at all and that it is a private banking cartel. The founders lobbied to be allowed to be the ones to print money for the US. Why the US can't be in charge of printing its own money is beyond me but I suppose the people in power applied forces to prevent it. When the Fed prints money the US receives the money and in exchange gives the Fed bonds with interest. So for every dollar printed into existence, there is more than a dollar owed back to the Fed. This means the US as a whole can never be debt free. It is mathematically impossible. You can only pay back the loan with other loans.

Think this all sounds far fetched? Look it up. You will find it is all true.

You really think gold makes more sense as a form of currency? WTF you gonna do with gold when you need to eat, it's useless too unless people say that is means something.

Under extreme circumstances, you are correct. Having gold on a deserted island is not going to do you any good. And it is also true that it is only of value to the extent that other people accept its value.

What is the alternative though? Currency originally came into existence due to the difficulty of bartering. If you wanted to get some bread from the bakery you would have to trade it with something the baker wanted. Let's say he wanted a certain amount of beef for a loaf of bread. You would then have to barter with the butcher but he only wants new shoes, and the shoemaker only wants bread. Without currency it is nearly impossible for modern civilization to exist.

The reason gold was chosen is because it was a scarce commodity, the supply is fairly steady and predictable. It could really be anything and different societies throughout history have used everything from precious metals, to pottery, to barrels of grain, to nails, to salt (the origin of the word salary), to sea shells.

Ultimately though commodities fluctuate based on finding new supplies, technology, and manufacturing techniques. Nobody has been able to produce gold through chemistry or other forms of technology. That is one reason it was chosen.

Commodities like grain are not an ideal because they do not hold their value (they can spoil), and it is something that needs to be consumed. Also, grain is very much subject to the whims of nature. With farming technology more grain can be produced and thus it becomes less valuable as a currency.

Ultimately though, the only true form of scarcity is labor.

The reason fiat currency (currency that is not backed by anything) have ALWAYS (yes ALWAYS) failed is that the people in control can just print more and more. History has shown that there has not been a single society that has stood the test of time with fiat currency. One of the most cited examples is during the Roman empire when silver coins were either shaved down or the silver content from the mint was decreased. The government realized that if they didn't use as much silver in the coins they could pay off their liabilities easier. Eventually the silver coin went from 100% silver to less than a fraction of 1%. Many other examples can be cited (Weimar Germany, France, the Roman Empire, and the list goes on).

This is why abandoning of the gold standard is seen by many as the beginning of the end.

the basic premise of the argument is flawed because this statement that it is based on is simply not true.

let me know when a loaf of bread is $10,000... then you might have something there.

I spend it on Hookers

They have been intentionally keeping the price of gold down. If you don;t have the actual gold you have a piece of paper that says you have gold. Same as your dollars. In addition they have been selling gold (on paper) on a reserve basis much like the banking system. IE they sell gold certificates 10x the amount they have on hand.

As far as the OPs original post the simple answer is YES and thats what I've been talking about on here forever.

I do not believe this is the case. What are you basing this statement on? I am not aware of a single fiat currency that has existed for more than a few hundred years. I would love to be proven wrong on this, as it means the US isn't as doomed as I would have previously thought but I don't think this is the case.

There are multiple examples in history that show printing currency without anything backing it (fiat currency) can not work. Weimar Germany is a more recent example of this case. France has had multiple failures with fiat currency within the last 400 years.

I recommend reading Robert Kiyosaki's "Rich Dad, Poor Dad". He answers this exact question quite well.

That graph is a little misleading...

500% since 1971 = ~4.2%/year

and if you exclude the 70s when inflation was unusually high
and do 1982 onward the inflation is actually ~3%/year :2 cents:

To doubters, check out Zimbabwe. Of course, it's an extreme case but there's nuggets of applicable truth there.

The CPI (aka C. P. Lie) is not an accurate measure of inflation. What is inflation? It is the reduced purchasing power due to the devaluation of a currency.

The people doing the CPI have been cooking the books. If inflation is based on purchasing power then you need to measure what people spend the majority of their money on. Housing, energy and food are chief among these.

The CPI deliberately excludes the big money items and instead chooses to only track inconsequential items in the index. Especially those that haven't inflated much. How convenient. ;)

Even worse they substitute one item on the index for another. They find the point where one item starts to become more expensive and then substitute it with another item that is declining and make the swap at the point where they are equal. They reason that they can do this is because they are exchanging it with something of equal value.

Another trick they use is as follows. Let's say you buy a computer and it costs $500. Well 2 years from now a $500 computer is twice as fast and powerful as the earlier computer. So what they do is say that the computer has now dropped to $250. From a certain standpoint this is true, but the problem is that computer is no longer being sold and is not really considered an acceptable computer for average use anymore. They also do things like saying that the washing machine with the electronic controls is more advanced and so worth more, even though it is cheaper to manufacture than the analog dial equivalent.

For a more accurate estimation of the CPI take a look at :
http://www.shadowstats.com/alternate...flation-charts

The above is a measure of the CPI based on the earlier rules before they started cheating.

If you are wondering why they cook the books, it is because the government has liabilities that they need to pay out and the amount they pay out is based on the CPI. For example, pensions, social security, etc. If they can say that inflation is lower than it actually is then they don't have to pay out as much. Rather convenient from them, don't you think?

One of my pet peeves is when people say that inflation was x% last year. Inflation is different for every person because they spend different proportions of their money on different things. To find out your true inflation you need to track the difference in price of items between 2 dates and then weight them according to the % of your money you spent on each item.

As long as the U.S. remains the leader in R&D, we will be fine.

The reality is that the US is currently too big to fail. For now.

What scares me more is our educational system.

Isn't education directly tied to R&D?

It's not new, anyone that knows or has a tiny little interest in economic theory knows that there's a lot more money (bills, credit, obligations, bonds and so on) that the total actives on Earth. At beginning of 90s it was 9x, so I assume now it must be more than 20x. That's one of the explanations of last year economic crack, and that's why all serious economists predicted a really hard situation coming up within the next 10 years. Most of the money out there is just painted paper with no backup at all.

Keep you money in assets that will appreciate with the economy. Invest some in foreign currencies that are undervalued VS US Dollar. Don't live on credit cards. IMHO.

They are depreciating assets to break the middle class. The objective is to get more people on government payroll (or at least "licensed") for control purposes. Originally they just made everyone employees by deception. The "laws" they are enforcing are in reality "stautues" which are nothing more than corporate policy. Now they are trying to make it official so they can enforce their corporate policies on us.

Exactly what R&D in the US do you speak of? Last I heard we were suppose to be the "service" economy. Sounds like a blowjob to me. And we're the suckers. Keep in mind we just paid billions of dollars to move our auto manufactureres to other countries. If you asked me I'd say we were in D&D business. Death and Destruction.

statutes :)

If the dollar is to become worthlless, you are better off living on credit cards and high debt. So if you truly believe this is going to happen you should load up on debt.

i am basing this on my degree in ancient history from UC Berkeley.

I could be wrong but I don't think so. as I learned about the history of civilizations, each of their collapses was not caused by a devalued currency. it's not a fact that the last stage of en empire on the verge of collapse is characterized by printing money.

maya, mesopotamia, chaco canyon, roman empire, han dynasty, greece, british empire, etc. none collapsed via money printed in a way that contributed to their decline, let alone create the collapse.

yes the worlds money is a scam.

http://en.wikipedia.org/wiki/Fiat_money

When the Fed prints money they require a payment with interest back. But when you print A and expect B back you have to print C and expect D back and so on. As long as there is more people borrowing dollars it will be alright, but once people stop borrowing dollars it all collapses. It is a Ponzi scheme.

Yes and no. Gold and the gold standard prevents excessive printing of money, because there is a limited supply of gold. But as long as the concept of "legal tender" is in place, as long as you allow the government to determine what is to be considered "money", you will always have a problem. As long as that government determines what is money, the government forces you to use/accept a certain product/item/commodity as a form of payment. And as long as there is an element of force involved, there cannot be a "market-determined value" of your money/gold.

btw: the gold market was very easily cornered. Just look at what happened after the demonetization of silver in 1873.

Look what is happening in Greece. One-third of the population on government payroll and system has collapsed. Germany is the only country with enough economic power to save Greece and they aren't crazy about the idea. However, if the Germans don't act, the EEC risks a domino effect of collapses as poorer nations go down.

The real bitch is the problem can again be traced back to Goldman Sachs and the Wall Street investment firms. Not good.

Article: "Wall Street aid led Greece, other nations into debt"

socialist! ;)

Do you think that, AT SOME POINT, the system is "too big to fail"?

Empires fail..its just progress...a 100 short years ago it was the British Empire.

guns and canned food :2 cents:

my favorite quote on gold

whatever happened to the british?

Yup. Ive said it for a few years now, if you dont have 3/6/12 months worth of food stored you are fucking crazy. This country is one major 9/11 style terror attack away from a very deep and long lasting depression. :Oh crap

You may be right.. One thing that most have in common is the spread of their empire too thin that eventually bankrupted the country, therefore making them create more money out of thin air to try to stay afloat... maybe?

it's my understanding that that is a component. another big part is inept management/leaders.

that being said, history is constantly being re-written, they way things were portrayed to me in college 15 years ago might have new angles and a tie can be made to printing money is a root cause.

but for instance, the mayans, historians can't even agree on what sort of currency they even used, lolz.

at least that is how i understand it, fun topic for sure!:thumbsup

Dude, you went to Cal too? Go Bears! Evan and Mike from Xpays are friends of mine from my Cal days.