The Check and Balance is the Debt Itself

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Hi Martin,
You correctly (I believe) describe what will happened:

Today it appears that we will first eliminate the paper currencies and move to a new electronic version to make avoiding taxes impossible. Hence people will flee to tangible assets and the velocity of money will decline taking the economy with it. That will most likely then result in civil unrest/war and then we will see a new type of Bretton Woods rebuilding the global economy adopting some new electronic world reserve currency.

Why will the governments not print new fiat money to infinity to delay the civil unrest/war?




ANSWER: Besides hyperinflation has only taken place in a post-revolutionary government or one that has NO BOND market, the core economy has ALWAYS collapsed by deflation WITHOUT EXCEPTION. It is war upon the people which causes society to collapse. The population of Rome collapsed because taxes kept rising and people just walked away from their property and that began the Dark Age and serfdom.

This story of hyperinflation has been the greatest bullshit sales job I have ever seen. It has zero basis in fact and it is simply a fraud upon the people to sell them gold. This nonsense has been used as the primary sales tool since the 1970s. It works unbelievable for it is purely sophistry.

Nov 1918 Revolution Berlin

There is the check and balance in a viable economy. Politicians will not turn to hyperinflation but default on obligations (pensions) because they understand the debt must be maintained or they lose power. I have explained numerous times that this absurd nonsense of hyperinflation is propaganda just to sell gold. It is factually incorrect as to the cause, and it is a complete distortion of history. Hyperinflation followed the German communist revolution where they DEFAULTED on all debt of the previous government and wanted to join Russia. They could not sell bonds and capital withdrew from the banks. ALL tangible assets rose in value against fictional money. It was real estate that ultimately became the backing of the new currency in the aftermath.

In our case, there is no wholesale default on debt. That would wipe out pensions including the Social Security system that has bonds in the drawer. It is the debt that is the check and balance. They will raise taxes trying to hold the system together. You will get war if you default both internationally and domestically.  As they say – damned no matter what we do.

DEFLATION is the ONLY way empires, nations, and city states collapse. That is a historical fact! You can count the hyperinflations on one hand historically – you need a computer to count the defaults by deflation of numerous governments since 6000 BC. Those in power shake-down the people to retain power. This is what they do! We have massive debt at the state and local levels that cannot print money. They can only default and that is the second force behind deflation as we saw in the City of Detroit.

No government has ever survived indefinitely. It has been debt that is ALWAYS the great destroyer.