Tuesday, October 13, 2009

Bill Fleckenstein: Your Dollars Are Just Monopoly Money

Author: Bill Fleckenstein in MSN Money
Since Nixon severed gold from the greenback in 1971, the dollar's comparative value has fallen 97%. Money printing today will only hasten the currency's destruction.
This week's column is going to be a little different, as I'd like to discuss human nature and the paper we call money from a slightly different perspective. I was recently thinking about what has transpired in this country in the past decade: first the equity bubble, then the real estate/credit bubble and the steady debasement of the dollar (where a trickle of trouble threatens to turn into a flood).
I have been struck by how few people seem to understand how all these events are related -- in that, at the root, they each have the irresponsible printing of money as the cause. (The sociological and psychological phenomena that go with that -- e.g., the regulators not doing their job -- are just part of the process.)
Each problem led to the next, and one year ago the financial system was bailed out at the risk of the country ultimately enduring a funding crisis.
One fact that strikes me is how few people seem to have been able to protect themselves from the first two (even though they were so obvious) and how so few will be able to save themselves from this third, huge problem.
Read the entire article here

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