Ahwatukee letter: Nation’s fiat currency doomed to fail - Ahwatukee Foothills News: Letters To The Editor

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Ahwatukee letter: Nation’s fiat currency doomed to fail

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Posted: Tuesday, July 1, 2014 9:30 am

We know all about past financial histories of failed governments. Every government with a fiat currency, like America’s, has failed. The maximum lifespan of fiat currencies has been 43 years. In America, we became a fiat currency in 1971, when Nixon took us off the gold standard. We are now in our 43rd year.

The actions of all of those governments were to spend and print more money than they had. Hyper-inflation ensued, causing prices to rise daily. An example of this was the Weimar Republic (now Germany). In one month, inflation rose 23,000 percent.

As a country, consumers, companies and our government have been going into debt at about 40 percent per year. This is happening because our government and our Federal Reserve (Fed) are playing financial suicide. These interventionist policies that are put in place intervene in the market, stopping free-market operation. When we have an administration that keeps spending more money than it has, and we have a Fed (that is not a part of our government) buying up 60 percent of all Treasuries sold, resulting in keeping the bond prices lower than market value. With this scenario, it encourages consumers, companies, and government spending with assumption of debt.

It isn’t only our government that is going to fail, it will be our country. The problem with our government is that they have been using phony bookkeeping practices that would never pass General Approved Accounting Practices (GAAP) standards. This is what politicians resort to when they want something, as there is no money to get it. The people will get screwed; there is no avoiding it. We now have only two options: (1) stop doing what we are doing, causing a large recession, or (2) not stop what we are doing, resulting in a huge depression, when hyper-inflation and high unemployment destroys us. We can thank the Fed and our government for this gift.

Don Crook

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