Friday, November 04, 2011

Europe’s unravelling but is that all?
Ad Orientem:
I doubt that we will see the complete collapse of fiat paper currency. But I do think that there is going to be a dramatic devaluation of most of the world’s currencies as a necessary consequence of the staggering levels of debt, which can not be paid off without some combination of a draconian program of austerity coupled with sharp tax rises and or deliberate financial repression with currency debasement and inflation as its corner piece. Historically few nations, and no democratic ones that I am aware of, have had the intestinal fortitude for the kind of long-term deep austerity that would be necessary. That leaves us with the printing press.
Margaret Thatcher said it best: “The problem with socialism is that eventually you run out of other people’s money.”

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