I thought this was a settled issue: the date is August 15, 1971. This is the exact date the US Government became a Ponzi scheme. On August 15 1971 gold was $35 per troy ounce. Today it's 3342. Not to worry though, all other governments are Ponzi schemes, too. We do not need to run faster than the bear - only faster than the next guy.
legitster•9mo ago
This isn't actually super relevant to the topic. Hyperfocusing on the dollar's exchange of value in a vacuum doesn't actually speak to the solvency of a government.
ein0p•9mo ago
Printing arbitrary amounts of money on a whim without actually backing it with anything does undermine the solvency of the government, however. As we will discover within the next decade or two, once US dollar loses its reserve status.
legitster•9mo ago
An old trope that's clearly untrue. The value of a currency is created by its usefulness as an exchange medium. And this is proved out with all sorts of artificial currencies - whether they are cryptocurrencies or Steam points.
Being pegged to a commodity does not imbue money with any more magical power than if the dollar was pegged to Beanie Babies.
If a government wants to run amok with a money printing press, that will certainly create inflation. But steady, low inflation over time is a good thing as it keeps people from sitting on their money and shrinking the economy (which is what prolonged the Great Depression).
As for the dollar losing its reserve status - that might happen a lot sooner than you think. If the current administration has it's way and we eliminate trade deficits, there will not be many dollars in foreign hands with which to use as a reserve.
ein0p•9mo ago
We'll see about that, won't we. Printing $2T in an average year and paying $1T+ in interest _with borrowed money_ certainly does feel like a Ponzi scheme to me. No way out of this either, only collapse, further underscoring the ponzi-like properties of the system. The question is only when.
legitster•9mo ago
I thought this was going to be about social security. Which is an actual Ponzi scheme in that the math relies on more young people working than retirees, which is quickly becoming untrue and unsustainable.
Everyone is worried about discretionary spending, but that's less than 1/3 of the US's budget.
ein0p•9mo ago
legitster•9mo ago
ein0p•9mo ago
legitster•9mo ago
Being pegged to a commodity does not imbue money with any more magical power than if the dollar was pegged to Beanie Babies.
If a government wants to run amok with a money printing press, that will certainly create inflation. But steady, low inflation over time is a good thing as it keeps people from sitting on their money and shrinking the economy (which is what prolonged the Great Depression).
As for the dollar losing its reserve status - that might happen a lot sooner than you think. If the current administration has it's way and we eliminate trade deficits, there will not be many dollars in foreign hands with which to use as a reserve.
ein0p•9mo ago