What is the problem?
Well basically the problem is that the world is run on currencies that are not backed with anything more than reputation.
Currency really is no more than a piece of paper that we all agree is worth something. It used to be that the dollar was backed by gold reserves but during the Nixon administration that all changed with a stroke of a pen. President Nixon changed the law that required all dollars be backed with gold and when he did that the dollar instantly became a currency.
You may wonder why that is a big deal well here it is. Instead of having to acquire more gold to expand the money supply all the government needs to do is to print more money. With that can come the abuse of power and potentially a collapse of the monetary system not only in the USA but in the world. Since 2007 the supply of printed money has gone from $825 billion dollars to $1,700 billion dollars.
The interesting thing is that most countries around the world back their weak currencies with the weakening USA dollar. What other choice do they have? The Euro? Yen? Peso? They are all in the same boat. They are all currencies.
Think about it for a moment.. If there is more money out there is that going to increase or decrease what things cost? What do we expect to see happen? Inflation? Deflation?
The reality is history shows us without fail that there will be inflation and that will eventually lead to a market collapse. In this case a global meltdown.
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posted by Seth Joiner @ 11:40 AM
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