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tfunk
Joined: 12 Aug 2006
Location: Dublin, Ireland
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 Posted: Sun Jan 25, 2009 7:08 pm Post subject: Money becoming worthless? |
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For all you economists out there...
Under what economic circumstances can money become worthless? Is there a risk that this scenario could happen in countries like Korea, America etc. under the current global situation? |
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Thedudeabides
Joined: 15 Jun 2008
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| Posted: Sun Jan 25, 2009 7:37 pm Post subject: |
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Without trying to be an armchair economist, I think by the time money would become worthless, there would be larger problems to worry about. I'm talking about massive food and energy shortages, war, and the general breakdown of everything we see around us. At that point, when businesses stop opening, we would see a return to the barter system.
This is a worst case scenario, which we won't see in the foreseeable future. Citizens in every country will keep buying food and other necessities, businesses will stay open, and the economy worldwide will recover and flourish. |
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sjrm
Joined: 27 Jul 2005
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| Posted: Sun Jan 25, 2009 11:01 pm Post subject: |
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| Ask the residents of Zimbabwe! With their inflation rate at about 50,000,000% or something around that, they've ended up not using their own currency, but instead using foreign currency to buy good since their own isn't worth the paper it's written on literally. Read more into it, and you'll see the effects of worthless currency. |
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Ilsanman
Joined: 15 Aug 2003
Location: Bucheon, Korea
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| Posted: Mon Jan 26, 2009 3:51 am Post subject: |
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| 50 million percent is months ago. They've topped trillions. |
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Rusty Shackleford
Joined: 08 May 2008
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| Posted: Mon Jan 26, 2009 4:00 am Post subject: |
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| sjrm wrote: |
| Ask the residents of Zimbabwe! With their inflation rate at about 50,000,000% or something around that, they've ended up not using their own currency, but instead using foreign currency to buy good since their own isn't worth the paper it's written on literally. Read more into it, and you'll see the effects of worthless currency. |
This would happen if you had an economy based on the sale of dirt then started printing money to enrich your cronies and maybe cover basic expenditure.
Developed economies are printing money right now, especially America, so there will be some inflation which will be good because it will wipe out some debt. But seeing that the "printed" money will hopefully be used for public infrastructure and will hopefully generate some value into the future we won't see a Zimbabwe situation in developed economies. |
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mole
Joined: 06 Feb 2003
Location: Act III
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| Posted: Mon Jan 26, 2009 8:47 am Post subject: |
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You need to read and research a lot to fully get it, but here's a few starters.
FIAT PAPER MONEY: The History and Evolution of Our Currency--Ralph T. Foster
"Dedicated to the world's worthless paper money."
I'm not sure if it's even in widespread print. My copy looks like a manuscript and is signed by the author.
"28 July 2008. mole- May our research benefit your long-term goals.... Ralph T. Foster"
I ordered the book because I'd seen it quoted in several financial commentary/editorials.
Particularly by Dr. Darryl Robert Schoon.
Look up Antal Fekete, Ludwig von Mises and Austrian School economics in general.
I'm currently reading Crash Proof by Peter D. Schiff.
Study hyperinflation in the Wiemar Republic. Here's a brief wiki.
To answer the OP question, CURRENCY becomes worthless through hyperinflation which is caused by printing paper monopoly money
that sheeple have been trained to accept in exchange for their labor and time. Sheeple eventually awaken to the fact that this paper,
no matter how widely accepted it has been for however long, is simply paper, unbacked by any hard asset.
Each fiat currency unit printed (on paper or digital cyberbyte) is created out of thin air as a debt. An unpayable irredeemable IOU.
Most tinfoil hatters (HI, Thunndarr~!) know there is not only the risk of this happening, but it's inevitable.
As evidenced by the fact that every fiat currency in history has failed.
Also see Zeitgeist: Addendum. Free streaming video on Google. |
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OneWayTraffic
Joined: 14 Mar 2005
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| Posted: Tue Jan 27, 2009 4:42 am Post subject: |
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| mole wrote: |
You need to read and research a lot to fully get it, but here's a few starters.
FIAT PAPER MONEY: The History and Evolution of Our Currency--Ralph T. Foster
"Dedicated to the world's worthless paper money."
I'm not sure if it's even in widespread print. My copy looks like a manuscript and is signed by the author.
"28 July 2008. mole- May our research benefit your long-term goals.... Ralph T. Foster"
I ordered the book because I'd seen it quoted in several financial commentary/editorials.
Particularly by Dr. Darryl Robert Schoon.
Look up Antal Fekete, Ludwig von Mises and Austrian School economics in general.
I'm currently reading Crash Proof by Peter D. Schiff.
Study hyperinflation in the Wiemar Republic. Here's a brief wiki.
To answer the OP question, CURRENCY becomes worthless through hyperinflation which is caused by printing paper monopoly money
that sheeple have been trained to accept in exchange for their labor and time. Sheeple eventually awaken to the fact that this paper,
no matter how widely accepted it has been for however long, is simply paper, unbacked by any hard asset.
Each fiat currency unit printed (on paper or digital cyberbyte) is created out of thin air as a debt. An unpayable irredeemable IOU.
Most tinfoil hatters (HI, Thunndarr~!) know there is not only the risk of this happening, but it's inevitable.
As evidenced by the fact that every fiat currency in history has failed.
Also see Zeitgeist: Addendum. Free streaming video on Google. |
Sooo...
I take it that you receive your payment in gold bullion? And what use is that anyway? Gold isn't exactly backed by anything of value; Paper currency is backed by the full faith and credit of the government.
Every fiat currency in history has failed, except the NZ, US, Can and Aus dollars, the pound, the riyal, the lira, the won, the yen the RMB and pretty much any currency currently used except the Zimbabwean dollar. And when Zimbabwee gets a decent government, they'll have a decent currency. The value of the currency is linked to the prudence of it's bank.
Eventually even the mighty US will depreciate into nothing, that's inevitiable. So we'll agree on another medium of exchange, and I bet it won't be gold backed. |
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greedy_bones
Joined: 01 Jul 2007
Location: not quite sure anymore
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| Posted: Tue Jan 27, 2009 8:35 am Post subject: |
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| mole wrote: |
Also see Zeitgeist: Addendum. Free streaming video on Google. |
That movie was terrible. It was three completely separate and unrelated parts which were each based on conjecture and poor logic. Part 1: Jesus isn't the son of God. Ok, I agree, but talking about other religions who have a similar story for twenty minutes isn't going to convince me. Also, what does Jesus have to do with 911? Part 2: 911 was staged by the US government who also decided to blow up another random building for no apparent reason. Part 3: There is a secret society founded by Woodrow Wilson which has started World War 1, World War 2 and the Iraq War. Taft, I could believe, but Wilson? |
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mole
Joined: 06 Feb 2003
Location: Act III
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| Posted: Tue Jan 27, 2009 12:38 pm Post subject: |
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G_B: That sounds like Zeitgeist. The Addendum version is well, as you might expect, NEW & IMPROVED!
OWT: Still have that letter-sweater you earned on the middle school debate team?
I'm preaching, not debating. |
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OneWayTraffic
Joined: 14 Mar 2005
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| Posted: Tue Jan 27, 2009 3:18 pm Post subject: |
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| mole wrote: |
G_B: That sounds like Zeitgeist. The Addendum version is well, as you might expect, NEW & IMPROVED!
OWT: Still have that letter-sweater you earned on the middle school debate team?
I'm preaching, not debating. |
Right, so you're not interested in learning anything or in a reasoned disscussion. Got it. |
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mole
Joined: 06 Feb 2003
Location: Act III
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| Posted: Thu Jan 29, 2009 12:39 am Post subject: |
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| OneWayTraffic wrote: |
| Right, so you're not interested in learning anything or in a reasoned disscussion. Got it. |
Not true. I'm not interested in debating. As I understand it, debating involves making and proving a point or debunking someone's point.
I'm a biology major. My fav prof told us a REAL scientist attempts to disprove his own theories.
When you set out to prove that you are correct, the entire process is automatically biased.
When you argue with a preacher, you are the only one affected, whether it be some "haha! I really showed HIM!" mini adrenaline rush or what.
I said I was preaching, meaning I didn't intend to open a debate.
I guess you win though, as I've taken your troll bait.
| OneWayTraffic wrote: |
Sooo...
I take it that you receive your payment in gold bullion? And what use is that anyway? Gold isn't exactly backed by anything of value; Paper currency is backed by the full faith and credit of the government.
Every fiat currency in history has failed, except the NZ, US, Can and Aus dollars, the pound, the riyal, the lira, the won, the yen the RMB and pretty much any currency currently used except the Zimbabwean dollar. And when Zimbabwee gets a decent government, they'll have a decent currency. The value of the currency is linked to the prudence of it's bank.
Eventually even the mighty US will depreciate into nothing, that's inevitiable. So we'll agree on another medium of exchange, and I bet it won't be gold backed. |
No one gives me gold. BUT I take every opportunity to convert my USDollars to [something else.]
Gold doesn't need backing. It is the original fundamental most basic MONEY.
Let us refer to Exter's Pyramid.
"Paper currency is backed by the full faith and credit of the government."
Do I need to discuss the absurdity of this statement?
It is an IOU, a promise.
Here's from Webster's Third New International Dictionary:
Fiat Money: Money (as paper currency) that is not convertible into coin or specie of equivalent value and thus is dependent for its value on the decree of government.
Yes, every fiat currency in history has failed, EXCEPT those currently in use. They don't fade out peacefully.
No one says, "hmm. This isn't working very well. Let's try something new."
Ralph T. Foster's book, Fiat Paper Money, has at the back a Table of National Notes that Became Worthless In Each Decade.
It starts at 1900, but has a couple of blank columns at the right with a footnote.
"*The reader is encouraged to add collapsed national currencies as they occur."
Any agreed upon and sustainable medium of exchange won't need backing by gold.
It will BE gold. |
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suadente
Joined: 27 Sep 2004
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| Posted: Thu Jan 29, 2009 4:40 am Post subject: |
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| Ilsanman wrote: |
| 50 million percent is months ago. They've topped trillions. |
Out of curiosity, I just checked: Jan. 28th.
1 US Dollar (USD) = 37,123,536 Zimbabwe Dollar (ZWD)
A week ago: Jan. 21st.
1 US Dollar (USD) = 19,446,204 Zimbabwe Dollar (ZWD)
Makes $1=1369 Korean Won look pretty good. 
http://www.oanda.com/convert/classic |
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OneWayTraffic
Joined: 14 Mar 2005
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| Posted: Thu Jan 29, 2009 4:57 am Post subject: |
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Except gold doesn't have any basic value and the price is certainly open to fluctuation. What would happen, for example, should we discover a mountain of the stuff in an asteroid somewhere? This is what happened when Columbus discovered America.
Gold's value is in it's rarity and the faith that it can be exchanged for someting of use. Should we see upheavals of a degree to make money worthless then I'm not sure gold will help much. In that case you'd be better off investing in a farm and guns and bullets. |
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OneWayTraffic
Joined: 14 Mar 2005
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| Posted: Thu Jan 29, 2009 4:57 am Post subject: |
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Except gold doesn't have any basic value and the price is certainly open to fluctuation. What would happen, for example, should we discover a mountain of the stuff in an asteroid somewhere? This is what happened when Columbus discovered America.
Gold's value is in it's rarity and the faith that it can be exchanged for someting of use. Should we see upheavals of a degree to make money worthless then I'm not sure gold will help much. In that case you'd be better off investing in a farm and guns and bullets. |
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Rusty Shackleford
Joined: 08 May 2008
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| Posted: Thu Jan 29, 2009 5:59 am Post subject: |
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| OneWayTraffic wrote: |
Except gold doesn't have any basic value and the price is certainly open to fluctuation. What would happen, for example, should we discover a mountain of the stuff in an asteroid somewhere? This is what happened when Columbus discovered America.
Gold's value is in it's rarity and the faith that it can be exchanged for someting of use. Should we see upheavals of a degree to make money worthless then I'm not sure gold will help much. In that case you'd be better off investing in a farm and guns and bullets. |
I read somewhere the other day that all the gold ever extracted from the earth would fit in a box 25X25X25 metres. Has nothing to do with your post, which I basically agree with, but interesting nonetheless. |
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