do you see the curve going vertical yet?
Why did we never get Ron Paul as president? He has quite the skill in foresight. Seven years ago, he introduced a bill to eliminate the Federal Reserve which would essentially have forced our country into adopting a new financial model for our economy. Before the crash.
"Though the Federal Reserve policy harms the average American, it benefits those in a position to take advantage of the cycles in monetary policy. The main beneficiaries are those who receive access to artificially inflated money and/or credit before the inflationary effects of the policy impact the entire economy. Federal Reserve policies also benefit big spending politicians who use the inflated currency created by the Fed to hide the true costs of the welfare-warfare state. ... the Constitution certainly does not empower the federal government to erode the American standard of living via an inflationary monetary policy."
- Ron Paul, http://www.house.gov/paul/congrec/congrec2002/cr091002b.htm
I've been saying that our financial system is based on an exponential math equation, and therefore it is designed to fail.
You can make lots of money off of such a system, as long as you stay ahead of the curve. It's like joining a pyramid scheme. It works, it really does, but you have to be at the top of the pyramid for it to benefit you. To keep the pyramid functioning, you have to keep adding resources (people, money) to the base. Moreover, the longer that you keep the pyramid-building operating alive, the more resources it takes to expand the base since each new layer of support has to be even larger than the one that preceded it. Once there are no more resources to feed into the operation, then the scheme finally collapses. That's the point that I call the asymptote/crash. It's an inevitable end, given the growth function used to create the system in the first place.
The chart here looks like the curve that I've been complaining about. I list below the url for the chart's source article. The article itself makes a good read too, though it's a little long. In particular, I recommend skipping to the end and reading the Concluding Remarks. Basically, he agrees that the problem with our financial model is that it requires that we keep adding money in ever-increasing quantities. Or, in his words, "The recent actions are the latest in an on-going process whereby collapse is delayed by issuing additional debt. These actions never correct the underlying problem, but merely delay it until a future time."
http://dollardaze.org/blog/?post_id=00578
It looks to me like we're already in the hyperinflationary part of the exponential curve. There are only two ways to keep the financial model working. One method is to "roll back the clock" to an earlier place on the curve. You do this by eliminating vast quantities of money from the system. Attempts by the government to buy back bad debt is such an example. They lie when they say they want to get a fair deal for taxpayers. They don't want fairness. That money needs to disappear altogether. If they can spend $10 in order to make $100 in bad debts disappear, then they'll do it. The other method is to continue creating money at an ever-increasing pace. We're doing that too. (Hence, the chart above.) It's the main method that we've used for a very long time. That's why the value of the dollar has fallen so far. There are just too many dollars. Hyperinflation makes each unit of money worth less, approaching zero.
This dollar chart comes from the same site. It's part of another long essay, this one explaining the history of paper money in general. Did you know that the US Dollar is the 3rd oldest paper money still in existence? I didn't.
http://dollardaze.org/blog/?post_id=00405
I still think that the US financial system is doomed. Not by mismanagement (which there's a lot of and is getting the press time these days) but by design. I still claim that it's a fundamental flaw in our finances to use an exponential function as the basis of creating money.
For the short term, I recommend buying stuff. Buy only long-lasting essentials, but buy the really good quality stuff. You might not be getting repairs for a long time, so it should be high quality merchandise.
For the long term, I recommend moving to a limited money supply. (Gold would be fine, except that the Middle East is already buying it up presumably to support their new financial system.) Such a system will not have to feed exponential growth, so it is theoretically sustainable. As an added benefit, everyone can see plainly how everyone else is jockeying to get more money at someone else's expense. Ethical review will be a lot more immediate. Exponential money creation is bad, so it must end. People will have to get used to the idea that savings accounts do not bear interest, and they have to actually produce work in order to earn money.
Money is supposed to represent work, not privilege.
"Though the Federal Reserve policy harms the average American, it benefits those in a position to take advantage of the cycles in monetary policy. The main beneficiaries are those who receive access to artificially inflated money and/or credit before the inflationary effects of the policy impact the entire economy. Federal Reserve policies also benefit big spending politicians who use the inflated currency created by the Fed to hide the true costs of the welfare-warfare state. ... the Constitution certainly does not empower the federal government to erode the American standard of living via an inflationary monetary policy."
- Ron Paul, http://www.house.gov/paul/congrec/congrec2002/cr091002b.htm
I've been saying that our financial system is based on an exponential math equation, and therefore it is designed to fail.
You can make lots of money off of such a system, as long as you stay ahead of the curve. It's like joining a pyramid scheme. It works, it really does, but you have to be at the top of the pyramid for it to benefit you. To keep the pyramid functioning, you have to keep adding resources (people, money) to the base. Moreover, the longer that you keep the pyramid-building operating alive, the more resources it takes to expand the base since each new layer of support has to be even larger than the one that preceded it. Once there are no more resources to feed into the operation, then the scheme finally collapses. That's the point that I call the asymptote/crash. It's an inevitable end, given the growth function used to create the system in the first place.
The chart here looks like the curve that I've been complaining about. I list below the url for the chart's source article. The article itself makes a good read too, though it's a little long. In particular, I recommend skipping to the end and reading the Concluding Remarks. Basically, he agrees that the problem with our financial model is that it requires that we keep adding money in ever-increasing quantities. Or, in his words, "The recent actions are the latest in an on-going process whereby collapse is delayed by issuing additional debt. These actions never correct the underlying problem, but merely delay it until a future time."
http://dollardaze.org/blog/?post_id=00578
It looks to me like we're already in the hyperinflationary part of the exponential curve. There are only two ways to keep the financial model working. One method is to "roll back the clock" to an earlier place on the curve. You do this by eliminating vast quantities of money from the system. Attempts by the government to buy back bad debt is such an example. They lie when they say they want to get a fair deal for taxpayers. They don't want fairness. That money needs to disappear altogether. If they can spend $10 in order to make $100 in bad debts disappear, then they'll do it. The other method is to continue creating money at an ever-increasing pace. We're doing that too. (Hence, the chart above.) It's the main method that we've used for a very long time. That's why the value of the dollar has fallen so far. There are just too many dollars. Hyperinflation makes each unit of money worth less, approaching zero.
This dollar chart comes from the same site. It's part of another long essay, this one explaining the history of paper money in general. Did you know that the US Dollar is the 3rd oldest paper money still in existence? I didn't.
http://dollardaze.org/blog/?post_id=00405
I still think that the US financial system is doomed. Not by mismanagement (which there's a lot of and is getting the press time these days) but by design. I still claim that it's a fundamental flaw in our finances to use an exponential function as the basis of creating money.
For the short term, I recommend buying stuff. Buy only long-lasting essentials, but buy the really good quality stuff. You might not be getting repairs for a long time, so it should be high quality merchandise.
For the long term, I recommend moving to a limited money supply. (Gold would be fine, except that the Middle East is already buying it up presumably to support their new financial system.) Such a system will not have to feed exponential growth, so it is theoretically sustainable. As an added benefit, everyone can see plainly how everyone else is jockeying to get more money at someone else's expense. Ethical review will be a lot more immediate. Exponential money creation is bad, so it must end. People will have to get used to the idea that savings accounts do not bear interest, and they have to actually produce work in order to earn money.
Money is supposed to represent work, not privilege.