Comment Re:Will this be like the CRU emails? (Score 1) 259
There are certainly problems with "hard currencies" as was seen when private individuals were able to corner markets on physical gold when much of the world currencies were based on the gold standard. However, the argument about how the current Federal Reserve system works in the US right now, is factually correct. All debt, when you count lending by banks to businesses and individuals, as well as government debt, could not be paid off as the debt in total is greater than the money supply. That is just one of the side effects of fractional reserve accounting.
The question is, can the overall system be sustained without succumbing to hyperinflation and collapse. If gradual inflation can be maintained the system is sustainable and the paradox of more debt than can be paid off is not disastrous. If on the other hand the debt grows too large too fast, hyperinflation can set in and the system collapses, resets, defaults, or what ever poison you want to pick.
This leads us to consider if the current pattern employed by our government, and population, in the US has already hit the point where hyperinflation is now inevitable due to the debt load. Going by WWII debt to GDP numbers, it would appear that collapse is not a foregone conclusion. How ever individual debt at that point was not at current levels. The US at that time was a net producer while now it is a net consumer. I myself am not very worried about a collapse. The Federal Reserve owns approximately 50% of the total debt. It is within the authority of Congress to dismantle the Fed and discharge all obligations to it, and I have no doubt that if faced with certain collapse emergency actions would be taken.
Molog