As if that could ever happen.
I really liked your entire post a lot.
Thanks.
“...because States will need to be much more self-sufficient if the dollar becomes unstable or worthless.”
>As if that could ever happen.
Truthfully, I’m foreseeing a real economic oddity, a currency split in the dollar.
To explain, right now it is obvious that parts of the government and the FED believe they can “print” as much money as they want to with little or no repercussions. For them, money is just numbers on a computer. However, some of the markets, like “derivatives”, have gone far beyond even this, in creating money out of thin air, supposedly a factor beyond the entire GDP of the world.
In effect, a man has walked into a casino, makes a bet and loses it, but instead of paying off, he doubles down, using his debt as a weird form of collateral. Then he keeps losing, and doubling, until his wager is more than the value of the casino. But he keeps wagering for 10x and even 100x the value of the casino. Both his and the casino’s theory is as long as they agree to his doubles, they can accept his bets forever.
Obviously, something has to happen to upset the apple cart.
Well, that is one situation. But the other situation is just as odd.
Real money. Paper money and coins. If you took every bit of it that exists, it is still less than 5% of the value of America’s daily retail sales.
The US Bureau of Engraving and Printing has only two high security printing offices in the US, one in Forth Worth and the other in Washington, D.C. Working at 100% capacity, they can barely maintain this level of 5% paper currency. The vast majority of the bills they print are $1 bills.
The highest denomination bill they print is $100, and so few of them that they *can’t* even print $500 bills, because nobody could make change for them. There aren’t enough $100 bills to do so.
So no matter what, paper money and coins are in effect 95% deflated right now. Only because the public accepts the notion that their virtual money can be redeemed as paper money, that virtual money is *equal* to paper money, has stopped our vast amounts of imaginary virtual money and our real money from splitting already.
What could break this confidence? Either a problem with virtual money, in which retailers decide they no longer will accept credit or debit, or bank checks, or anything but cash; and/or there is a “cash run” on the banks, emptying every bank branch in the US within an hour, and leaving people with lots of virtual money that nobody wants.
And here’s the zinger. Only paper money and coins are “legal tender”. No virtual instrument is legal tender, good for debts, public and private. Only the real thing.
Nobody has to sell anyone anything. But if they have already sold something, by law, cash must be accepted as a means to resolve that debt.
Bottom line: It would be very, very good to have “mattress money” at home, in a safe place. Banks can have holidays, and virtual instruments might be invalidated, so only cash in hand is guaranteed to be yours, when you want it.