warmonger1981 wrote:The difference between now and previous currencies is the the dollar has tangled a web so diverse and thick nobody can navigate it with ease. The world is much more dependant upon other economic systems. These systems are much more complex. Countries rely more on each other now than they ever have in the past.
The "but it's different now" argument. Ok. <shurgs> The American dollar collapsed already once. In 1971. This current system is only 45 years old. The dollar that was before 1971 is gone.
Do you know the average lifespan of a fiat currency? Between 27 and 39 years. That's it.
There have been 3,800 fiat currencies during the history of civilization. The exact same thing happened to every single one of them (excluding the current fiat currencies which as of right now there are 167 official fiat currencies. NOTE: there are 196 nations, 19 of them don't have their own currency, they use other nations).
The oldest fiat currency is the Pound Sterling, but it wasn't really a fiat currency until Bretton Woods went down.
Of all the fiat currencies ever used in the history of the world, there is no case in which it has been successful. Ever. Every fiat currency so far has been destroyed by hyperinflation, war, independence or were monetarily reformed. Like the dollar back in 1971.
The Pound Sterling, the most successful currency in the history of the world, was founded in 1694. The original Pound Sterling was a full troy ounce of pure silver (hence the name) but today there isn't a gram of actual silver in a Pound Sterling. The Pound Sterling has lost 98.4% of it's value. The most successful currency in the history of the world has lost over 98% of it's value.
Remember, when you price anything, any commodity when priced in anything
other than a fiat currency, every single thing is cheaper now than it ever has been in the history of the world. Nothing has gotten more expensive, not a thing. Food is plentiful, resources are plentiful, yet it appears that everything gets more and more expensive. It's not that the commodities are getting more expensive, it's that the currency we use to exchange goods is getting worth less and less and less.
That is the problem with fiat currencies. Fiat currencies have some good qualities about them, it allows for the easy expansion of debt. But that's stupid when you think about isn't it? Debt? To use today what you are going to produce in the future. It's all good until the future becomes the present and you've already used up everything you produced.
Don't forget what money is, it's just a tool. Currency itself is not wealth. Things are wealth. Currency is just the medium upon which we exchange the goods. We don't have to use currency.
The interconnected world you talk about doesn't go away just because the medium of exchange becomes worthless. People are still going to need food, resources. People are still going to produce those resources, for themselves if nothing else because we need them just to
live. Those who produce and those who wish to purchase those goods will always come to some agreement as to how to distribute said goods. If the dollar becomes worthless then the parties will agree on something else.
For instance, warmonger, you wake up tomorrow and the dollar is gone, just worthless. It doesn't even make good toilet paper because it rips your asshole. You're hungry, you go to your fridge and there's nothing in it. You can't go to the grocery store because all you have is worthless dollars that the store isn't going to accept.
Then you remember your neighbor has some chickens.
Now, you could go over to your neighbor's house, kill him and take the chickens. But there is no sense in that because you know you'll face retaliation from your neighbor's friends and family. Your breakfast would surely end up with you being dead if you go that route. However, you do happen to have a whole shitload of chopped wood. You go to your neighbor and offer to trade some wood for some eggs. He doesn't need any wood, but he does have some gold. He offers to buy your wood with some gold, and then offers to sell you some eggs for gold. You see, your neighbor knows another guy who would love to have some of that wood. The transaction is valuable to you both so you go ahead and do it.
In no time at all you'll find that people come up with alternatives to currency when the currency becomes worthless or otherwise unusable.
The most recent example of this is in Greece where the EU came in and pretty much looted the country of all it's euros. Facing a severe shortage of euros lo and behold private currencies started rising up. Those currencies tied to commodities or other currencies that someone had an abundance of. In your case, your neighbor might start making his own currency that can be exchanged for eggs on demand by the holder. People will want that currency, because if they have a few of them in their pocket they are guaranteed to be at least able to exchange them for eggs. That is an example of a private currency and it's not a fiat currency because it's tied directly to some commodity.
Fiat currencies are so bad and are known to be unstable, there is zero dispute on that. They always fail. Commodity money, on the other hand, is much more stable. However, the expansion of credit gets to be a problem with commodity money. You see, if your neighbor starts creating more currency than he has eggs to cover if everyone showed up one day to exchange them for eggs, he'd be fucked. So he can only safely create enough currency that he has eggs to cover.
When the dollar fails, fortunes will be lost, some people might freak out, but it would be replaced quickly, extremely quickly because people still need to trade things to live. No person can produce all the things they need to survive, it's not equitable nor practical to try and do everything yourself that needs to be done. You can't grow your own food, build your own shelter, cut your own hair, operate on yourself, make architectural plans, provide security for yourself, secure energy and all the other things one needs. There aren't enough hours in the day even if you had all the required skills. Division of labor is the best way to accomplish these things and the medium from which that labor is exchanged can literally be anything, anything at all.
The Mongols used Yak dung.
The British built the entire British Empire with the Tally Stick.
Indonesian peoples used sea shells.
Pharaoh used a commodity money based on grain when Joseph told him of the seven lean cows and the seven fat cows. That currency ended up making Egypt one of the most fabulously wealthy nations on the planet at the time. You might not believe in the story of Joseph but the ancient Egyptians used a grain based money and in times of famine every nation and tribe in the known world traveled to Egypt to get grain and it made them so rich the Pharaohs were able to bury themselves with tons of gold and jewels.
These fundamental don't change. The only thing that has ever changed is the medium with which we use to divide up the labor of the peoples of the world. Locally, nationwide and world wide. When the dollar dies (and it will die) one thing will always be there to take it's place quickly and easily until something else can be worked out, Gold.
Gold is money. It's always valuable. If there are no dollars or fiat currencies are worthless, I guarantee producers will take gold instead. You don't have any gold? Well you better have some skill, some commodity, something of value you can trade for gold or your fucked in the short run.
But isn't that already how it is? If you are a POS that doesn't know how to do anything, has zero skills, ambition or knowledge, you ain't gonna be living the rich life are you?
The "It's different this time" is bullshit, it's the same argument people made when every other fiat currency went kaput. People and countries relied on each other before there ever was a "dollar". People had complex economic systems in the past. The Roman economic system so mirrors our own it's scary. There ain't nothing new. If you brought an ancient Roman from the past in a time machine to the present and you tossed him a quarter, he'd know exactly what it was. He'd think George Washington was some type of Caesar but he'd know instantly it was money. He'd also know he'd have to perform some service, give some labor to acquire some more of those coins. He'd figure out real quick what a dollar was too and he'd just do what he could to work and earn whatever medium people use to exchange goods and services. Hey, maybe he'll try and stab you with his Gladius and take your money but he'd have the smarts to know that probably won't work out well for him in the immediate future after doing such a thing.
The only thing we got now, which destroyed other currencies in the past, mind you, is a whole lot of fucking debt. Debt always ends up destroying currencies and in the end someone takes a haircut. The old system will be replaced with a new system that works exactly the same and we'll just start the whole fucking cycle back over.
