kidmercury

A currency crisis is when the value of the currency falls dramatically, thus wiping out the purchasing power of an entire nation in a short amount of time. This happened in Argentina in 2001/2002. It has been going on in Zimbabwe for a couple years. It is happening in Iceland now.

And, of course, I expect it to happen here in the United States, and I expect it within four years.

One of the ways a currency crisis can happen is when the government of a country borrows and invests, but fails in its investments, and thus cannot pay back the money it has borrowed. This results in everyone running away from the currency, because they know the government will need to resort to simply printing more money -- and will probably need to issue more debt to sustain its operations. This situation causes everyone to run out of the currency.

As this article from Peter Schiff notes, the US government is now borrowing at 3% to refinance mortgages and lend at 4.5%. The government will argue this is a winning trade (because it is lending at a better rate than it is borrowing), but I highly doubt it -- Schiff explains why in his article. More importantly, do you really think it is a good idea for a government to borrow and invest, behaving essentially like a hedge fund?

Note that this is essentially the same as what Iceland did. The end result was the value of the Icelandic krona collapsing.

How This Could Be a Good Thing

Out of darkness comes light is a concept I like, and I think it may apply here as well, as I tend to view the macroeconomic shift that is occurring as being fated. I think the solution, the real revolution, is to simply play the same game: communities everywhere need to establish their own currencies, and they need to create their own centrally planned economy. I view this as step #2 in the revolution; step #1 of course being getting the word out and people awakening to the fact that something must be done.

The online technology to deliver this solution is one opportunity I would like to explore for my business, and is something I find quite exciting, as I think it will be both immensely profitable and positively world changing. But of course, we are still at step #1, which is getting people to awaken to the fact that there is a real problem, and that solving this problem starts with looking in the mirror.

See my previous post on how virtual currencies defeat the New World Order. It certainly has many flaws, but I honestly can't think of how else we are going to solve this currency crisis without a solution coming from government (because, as conspiracists know, the government is manufacturing this entire thing so that they can pose as the saviors who deliver the solution of more government. Problem-reaction-solution, as we have discussed before.)