Rather than save this for the weekly links, I thought I'd post it now since I see the issue of currency devaluation as a cornerstone of the continuing credit crisis in our country. Bill Fleckenstein has been a notorious bear for a decade, warning against the tech bubble, the real estate bubble, and the credit bubble. With articulate precision he was right in all three cases. Will he be right this time? I don't know, but my premises are echoed in his article (link below) about the dollar, and its lack of inherent value (actually, the only thing that gives the dollar value is the ability of the U.S Government to back it, and the of the citizenry that the US Government will continue to do so). I have posted several times regarding my concerns pertaining to the increasing debt load of our federal government, and the increasing pace at which the Federal Reserve is printing money. To summarize my understanding of the risk of the increasing and unprecedented national debt, there are only three possible outcomes to rid the nation of this debt burden:
1) An increase in national productivity that creates revenues (and thereby taxes) through demand for a suite of products.
2) Default.
3) Monetize the debt, or in other words print enough money to pay it off....at this point 12 trillion and growing, not including the need to fund social programs like social security, medicare, and possibly a new public healthcare system.
I don't know folks. It seems to be the nature of the U.S. citizenry to assume all will end well. It seems to be my nature to disagree. I really welcome comments on this one.
http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/your-dollars-are-just-monopoly-money.aspx
Fubsy
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