The dollar is a claim on the wealth producing capacity of America.

When it was backed by gold, it was really backed by the ability of American wealth to procure all the gold necessary to ensure that the “dollar was as good as gold”.

When the dollar was no longer convertible into gold, it was still backed by the wealth producing capacity of America. It was a given that this capacity would continue to increase: it was not the full faith and credit of Congress but faith in the capacity of free Americans doing real work in free markets to create real value and world was willing to give full credit to American productivity, ingenuity and liberty to ensure that US currency was indeed “as sound as a dollar”.

Now the dollar is backed merely by the vapors and delusions of the US Regime. The Productive American economy continues to compress, fewer and fewer Americans do real work to create real value, the Parasitic economy expands, liabilities soar, systematic long term wealth producing capacity shrinks by the day while the fiat dollar breeds and spreads like a plague of locusts.
As a consequence a maniacal and criminal expansion of dollars is colliding with a willful reduction in American wealth producing capacity. Vastly more dollars are now an unsustainable claim on manifestly less capacity to produce wealth. Of course, the “price” of the dollar must collapse to reflect the implacable truth of this ratio.

Now the world says with a mixture of deep regret and mounting contempt “as fake as a dollar”.

-

Related Posts:

• Productive Economy vs. Statistical Economy vs. Parasitic Economy
• Unemployment Misery may be defined as the product of Burden and Composition.
• TARP funds is fictional currency that never existed (virtual money).
• Jim Bunning is the man!
• BBC UK: US jobless numbers hide scale of problem!

Leave a comment