Page 1 of 1
Jim rogers interviewed on FT
Posted: Mon Nov 17, 2008 11:40 pm
http://www.ft.com/cms/s/893ac9c8-757e-1 ... omSearch=n
Wow, worthless dollars... Hope not! I suppose the only survival strategy would be gold or euros, or? Difficult to imagine that level of chaos, yet not impossible...
All fiat currency has zero instrinsic value
Posted: Tue Nov 18, 2008 11:25 am
All paper money that is not backed by something "real" like gold or silver has zero intrinsic value (other than it's use as toilet paper when it finally and inevitably devalues).
The "value" of a fiat currency is simply a perceived value based on what amount of product or service the currency unit will currently purchase, which in turn is based on confidence in the issuing institution.
Inflate the supply of a fiat currency without the corresponding increase in the economic output of the country, or decrease in the spending of the government of the country, and you get inflation of prices (i.e. things cost more currency units than they did before). If this continues uncontrolled for long enough you get hyper-inflation and then the currency becomes worthless in terms of its value relative to products or services (i.e. prices of things sky-rocket when measured in terms of the devalued currency).
Keep hold of those gold bars, grow your own groceries and hope there's a sudden unanticipated massive efficiency increase in global production - fiscal responsibility is just to much to hope for
There's a long list of fiat paper currency that is now defunct - none of the current major global currencies are really any different than the defunct historical ones.