Key to sound economy is sound money.

 THE END TO FIAT CURRENCY IS COMING

WEST'S ECONOMIC PROBLEMS ROOTED IN FALSE PREMISE

Fiat currency, has been embraced by every country on earth. The United States ended its backing of its currency in 1971 and every nation on earth has followed. Historically gold and silver were considered money and often a paper receipt was issued to facilitate easy transactions. These paper receipts were redeemable in gold or silver. This has been the traditional role of money since ancient times. It is always the temptation of rulers, bankers and governments to first debase the currency by making coins smaller and then issuing more receipts than actual metal. In past times a private banker who engaged in this fraud was often the victim of vigilante justice as many had their savings stolen in this way.

In the 20th century, governments have universally debased their currency and often through propaganda convinced the populace that this was a sound practice in the modern economy. We were told that this currency no longer needed to be convertible or exchanged for a real asset, but it was guaranteed by the full faith and credit of the issuing government. In reality, it was fraud plain and simple. We were told that the goal was to keep the debasement of your savings at 2% a year as this was now the sound currency of the modern age. It was taking advantage of the citizens by slowing stealing their hard earned labor and savings and allowing all governments to make saving a losing proposition. All currency became not an asset, but represented the debt of the issuer, to be repaid in more debased currency. 

We are now at the end of this fiat currency fraud. It is obvious that the largest economy in the world is soon unable to finance even the interest on this massive debt. Most western nations are in the same boat. The real savings of its citizens is now hostage to financing government debt rather than real investment in producing companies and infrastructure or wealth building endeavors. While most of the leadership hope to keep this Ponzi scheme going it is now having to compete with an alternative, that just by its very existence, will end the present fiat currencies.

While it is going to be a painful transition, it is inevitable that the present debt based system is now on its death bed, it can not be saved by more debt or more imaginative financial instruments. Attempting to save this corrupt system by war or force or intimidation will only make the transition that is necessary only more painful.