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A Thousand Pictures Is Worth One Word: Worthless

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http://www.zerohedge.com/news/thousand-pictures-worth-one-word-worthless

Jeff Clark of Casey Research has created a wonderful historical "art" album which addresses the number one question which most people living in the US right now are unable to fathom: how can one's currency go from X to 0. It is impossible. It certainly can not happen to the dollar. Right? Well, as Jeff says: "History has a message for us: No fiat currency has lasted forever. Eventually, they all fail. You might suspect this happened only to third world countries. You’d be wrong. There was no discrimination as to the size or perceived stability of a nation’s economy; if the leaders abused their currency, the country paid the price." We may add one other thing: no country in the history of the world has imploded from hyperdeflation. Not one. At the point where the debt load was insurmountable and not enough cash flow was being generated to sustain it, the authorities would always find a way to step in and be the terminal source of dilutive fiat demand: from ancient Rome, to Weimar, to the collapse of the Soviet Block, to, inevitably, the unwind of the failed (neo) Keynesian model, where we are right about now. Sure, we can all come up with goalseeked theories that validate our perspective but they are all meaningless at the end. Past a given threshold debt money ceases to function as backed by the full "faith and credit" of the backstopper and is nothing but paper.

Pictures of dead fiat currencies at the link.

At the moment we live in a fiat world.....

Well no currency can last forever as that's a very long time indeed. In fact all currencies get replaced, no currency is immune to inflation, but the fiat currency is prone to easy manipulation.

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http://www.zerohedge.com/news/thousand-pictures-worth-one-word-worthless

Pictures of dead fiat currencies at the link.

At the moment we live in a fiat world.....

Well no currency can last forever as that's a very long time indeed. In fact all currencies get replaced, no currency is immune to inflation, but the fiat currency is prone to easy manipulation.

well, thereis _one_ currency that is universal, and has watched all these bits of paper come and go...

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well, thereis _one_ currency that is universal, and has watched all these bits of paper come and go...

Oops :unsure:

Second post, and this thread is already heading towards relegation to a certain sub-forum.

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More latent anxiety from gold bugs.

Oops :unsure:

Second post, and this thread is already heading towards relegation to a certain sub-forum.

Lol... well, it is late, and I have had a drop of the golden liquid (not fosters! oi!)... It comes from Scotland.

Just couldn't help myself.

Although seriously, long term (over the centuries that the OP is talking about), what else holds its own?

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More latent anxiety from gold bugs.

We apologize for not sharing your confidence in bankrupt governments.

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All fiat currencies perish. This is not a debate. It's fact.

Well obviously not. The British pound and the USD have not perished. The claim that "no fiat currency has lasted for ever" is logical nonsense. All we can say accurately is that, "of all the fiat currencies in history, many have perished, apart from those that still exist today."

And anyway, is it really that big a deal? Show me a country that has not changed its borders and has retained its sovereignty for 200 years. Or a hundred years, come to think of it. Yet the nation state still prospers.

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Well obviously not. The British pound and the USD have not perished. The claim that "no fiat currency has lasted for ever" is logical nonsense. All we can say accurately is that, "of all the fiat currencies in history, many have perished, apart from those that still exist today."

And anyway, is it really that big a deal? Show me a country that has not changed its borders and has retained its sovereignty for 200 years. Or a hundred years, come to think of it. Yet the nation state still prospers.

The USD of today is NOT the USD of the past.

The old USD died in 1971 from the Nixon Shock. As they changed the T&C of it, it was no longer backed by anything tangible therefore the $ of today is NOT the $ of the past.

Same thing with the GBP they went and decimalised it in the 70s meaning the £ today is NOT the £ before this. Along with the fact we came off the gold standard and the silver standard many times. Each one was the death of the old currency and a new less backed currency to replace it.

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Meanwhile, the paper bugs crack a wry smile as the exchange of their notes increases (albeit ploddingly) vs property......

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...Along with the fact we came off the gold standard and the silver standard many times. Each one was the death of the old currency and a new less backed currency to replace it.

The question there is why did we go onto and come off of the gold standard?

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Well obviously not. The British pound and the USD have not perished. The claim that "no fiat currency has lasted for ever" is logical nonsense. All we can say accurately is that, "of all the fiat currencies in history, many have perished, apart from those that still exist today."

And anyway, is it really that big a deal? Show me a country that has not changed its borders and has retained its sovereignty for 200 years. Or a hundred years, come to think of it. Yet the nation state still prospers.

"from 1971 through 2009 the British Pound has lost about 91% of its buying power." Wikipedia

Debasement is a bitch.

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Whilst logically your point is correct and impressive, it is equally correct to state that mankind is doomed as no star can burn bright forever. In which case, the strict physical laws would imply that the purpose of the means of exchange must perish with him.

I agree with you, unless of course, mankind outlives the death of its own star.

Of course, I could have childishly used the same argument to argue against the definite mortality of human beings, as there are people who have not died. But more accurately, it could be used to counter an argument that all democratic countries are doomed, because "no democracy has lasted for ever," and I think that there are parallels between the two lines of though.

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The USD of today is NOT the USD of the past.

The old USD died in 1971 from the Nixon Shock. As they changed the T&C of it, it was no longer backed by anything tangible therefore the $ of today is NOT the $ of the past.

Same thing with the GBP they went and decimalised it in the 70s meaning the £ today is NOT the £ before this. Along with the fact we came off the gold standard and the silver standard many times. Each one was the death of the old currency and a new less backed currency to replace it.

That was not my argument at all. I recognise that both USD and GBP came off the gold standard, but the fiat equivalent still survives. In fact, perhaps the argument should be:

"no gold-backed currency has lasted for ever...history shows that gold-backed currencies eventually perish, to be replaced by fiat alternatives."

The argument from the zero-hedge site has got more holes that a Swiss cheese.

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Well obviously not. The British pound and the USD have not perished.

Indeed, and they have been fiat currencies since the mid 18th century at which point the debt issuance of these (and other) nations began to serve as money.

Now, back to your daily dose of goldbuggery.

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The question there is why did we go onto and come off of the gold standard?

Because politicians want control over anything and everything, especially if they don't understand it. They like to change it so they think they do understand it.

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Really showing my age now... :unsure:

Does anyone remember the sketch from Smith and Jones in the late 80s or early 90s which showed a furniture sale at some bargain warehouse in a country with a collapsing currency which had all the prices flashing up on the screen

"Yours for only one million million million million million million million million million million million million million million (whatever it was)"

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Really showing my age now... :unsure:

Does anyone remember the sketch from Smith and Jones in the late 80s or early 90s which showed a furniture sale at some bargain warehouse in a country with a collapsing currency which had all the prices flashing up on the screen

"Yours for only one million million million million million million million million million million million million million million (whatever it was)"

It was the fast show when, they had adverts which were semi spanish/italian/greek/turkish.

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"from 1971 through 2009 the British Pound has lost about 91% of its buying power." Wikipedia

Debasement is a bitch.

From 1981 to 2001 gold lost about 95% of its buying power relative to paper dollars.

Your point is?

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It was the fast show when, they had adverts which were semi spanish/italian/greek/turkish.

You, Sir, are a star.

I can't find that particular clip, but this is so relevant still.

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Well obviously not. The British pound and the USD have not perished.

The completely fiat US dollar has only existed since 1971.

That same year saw the birth of the modern pound, with 100 pence to a pound instead of all that 240 pence to a pound, shillings and threpance gubbins.

Also, if you think that the dollar has not perished, remember that it has lost 97% of its purchasing power since 1913 (link).

Here is a picture from a 2003 House of Commons paper (also attached to this post) showing the purchasing power of the pound over the past several centuries. Notice how it remained pretty constant for hundreds of years. It started to dip in 1914 (when we came off the gold standard), briefly recovered (when we went back on the gold standard in the twenties) then fell remorselessly for the rest of the century as we came off it for good.

http://www.moneyweek.com/~/media/MoneyWeek/2009/090119/09-01-21-MMchart5.ashx

Still think that the pound hasn't perished?

11-02-02-MM01.ashx.gif

post-15379-0-85850000-1311808079_thumb.gif

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From 1981 to 2001 gold lost about 95% of its buying power relative to paper dollars.

Your point is?

95%?

But what one has to be extremely careful about is the fact that this price was an extreme movement which didn't last for too long at that time. Gold moved above $700 and stayed there for just a couple of weeks before dropping into the $300-500 range (nominal) for most of the '80s.

LINK

I make that about 50%.

Gold is recovering.

The dollar has continued its decline since the 1980s.

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From 1981 to 2001 gold lost about 95% of its buying power relative to paper dollars.

Your point is?

Paper will never recover. Gold will.

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  • 276 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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