When talking about bailouts and the constant printing of money for eveything under the sun a lot of people seem to forget one simple thing.

In this present environment no more actual bills are being printed nor money coined. Everything they have done is only numbers on a computer screen or IOUs in the form of bonds.

It is the dubious gap between actual printed money and total electronic money/debt that allows our dollars to stay strong as the debt accumularing spree continues unabated.

Confidence is still high and remains that way as long as GDP is healthy. If confidence erode it is when governments truly monetinze debt by printing things like billion ..... notes that hyperinflation occurs. One need only look at numerous countries in Africa and Europe before the EU.

It is all a confidence game and as long as the top dogs can concentrate the capital in their hands and limit access to the average person investment is seen as beneficial. Countries will continue to buy debt as long as they know people can be enslaved to it.

So what really determines the value of a currency. First is probably the stability of the government. Then the acceptance of that currency around the world. Then productivity, GDP, etc. The point is that debt and total money (not actual printed) in circulation is pretty far down the list in determining stability.

Also the fact that other major economies in the world are in turmoil keeps the dollar strong. We are still the reserve currency and were we to succomb to hyperinflation the economies of the world would come crashing down.

[edit on 12-5-2010 by ISHAMAGI]

[edit on 12-5-2010 by ISHAMAGI]

I disagree.

Numbers on a computer screen spend the same way as physical dollars unless (like paper money) they aren't used and simply stored in bank vaults.

They are being used though. There are two reasons we are still afloat:

1) Borrowing/money creation

2) The use of US Dollars in practically all international trade.

Otherwise, we'd be awash in money, and probably still will. I think by the end of the year you might disagree with how strong you think things really are now.

[edit on 12-5-2010 by KrazyJethro]

but that's even worse that it is just numbers on a computer screen. Sure, in Germany and South America inflation was in terms of physical currency, so a loaf of bread cost a wheelbarrow of paper, but in this economy, since everything is digital, the banks basically can buy up anything they want for free, since it's just numbers on a computer screen that keep growing and growing. Before, they were limited only by how much physical money they could print and move, now they're only limited by transaction and paperwork. Money is no longer a real thing but simply an arbitrary number that keeps growing. I think they want to phase out the dollar, not over inflate it.

Originally posted by filosophia
but that's even worse that it is just numbers on a computer screen. Sure, in Germany and South America inflation was in terms of physical currency, so a loaf of bread cost a wheelbarrow of paper, but in this economy, since everything is digital, the banks basically can buy up anything they want for free, since it's just numbers on a computer screen that keep growing and growing. Before, they were limited only by how much physical money they could print and move, now they're only limited by transaction and paperwork. Money is no longer a real thing but simply an arbitrary number that keeps growing. I think they want to phase out the dollar, not over inflate it.

I am in total agreement with you. I am not saying it is a good thing at all, in fact, its horrendous. I'm just stating reality.

"Confidence is still high and remains that way as long as GDP is healthy."

Uff ... US "thing" productive economy is based on weapons. If we stop the wars, the tinny residuums of US economy will fall. Maybe I'm naive and all US economy can be based on Taser manufacturing and use (it is service for you, you dumb citizen!). I'm going to take care about my carrot at my garden. Bye bye.

All currencies are manipulated.

For example: Chinese currency has been manipulated like crazy, they keep buying our debt with currency that is manipulated and thus is not worth the actual value.

American currency is and has been manipulated since we left the gold standard.

The Euro is a manipulated currency as well.

All major currencies in the world are manipulated and don't actually hold weight unless we put a value on them.

In other words the Hundred dollar bill you hold isn't worth the paper it's printed on, unless someone tells you it's worth that amount. Same thing goes for the rest of the world.

Everyone say thank you to the private corporation that prints our dollars.

If you look at everything that goes around the world, the only thing that has happened is we allowed a few more governments to get in on the game. So the fear of "China" or any other government taking over the world is hilarious. This world is controlled by the elite and they allow the rest of the world to join the game when they feel like it.

I have to disagree.. Inflation is really bad at the moment, perhaps the worst I have seen in my life. I see the .gov pitching stimulus, etc.. but what about the responsibility of the rest of corporate America. It's a greedy posture and there is a vendor/store trying to rip-off the consumers at every turn. Foreign countries have bought America for pennies on the dollar and the fluctuations you are seeing with the dollar/gold and markets are artificially manipulated. It's really sickening no matter you vote. The govt can't control the corporate greed and they are leveraging it in many ways. Certain goods and vendors need to be boycotted into submission, but their is nobody leading the charge.

The problem of modern day money is that its used as a product and is only supposed to resemble the value of a product.

Because its used as a product, any resembled value is no longer a a true products value.
This effect can is used against us and can make us pay 100 dollar for a bread or just one.

The fact remains, the bread didn't get more expensive. Only the money did.



I think...

The text book definition of inflation is to many dollars (money) chasing to few goods.

If you look around the world today it is awash in fiat currencies, but it is also awash in all kinds of consumer goods, empty houses, empty retail and office space, manufacturing overcapacity in virtually every industry and millions of people without jobs who aren't buying things.

Until that turns around we will not see moderate much less hyper inflation.

One trick to inflation is keeping the money out of the hands of people, who will just spend it & drive up prices.

I think the crooked oligarchs are doing a pretty good job of that.

Where you will have noticed inflation is in fine art objects & other items from Sothebys & elsewhere reaching ever higher record prices.

There is also the dead-cat bounce argument.
Even a dead cat has at least one bounce left in them. [apologies to cats everywhere]

What it probably is, is as screwed up & insane as the US government is, everywhere else is likely even worse & more corrupt & insane.

So more correctly the dollar is RELATIVELY stronger.
And relativity is all about just how warped things are,

and things are VERY warped here,
they are just vastly more warped elsewhere.

Grandma always said,
"Don't measure things with stretchy rubber rulers."

And Grandma was always right.

[edit on 12-5-2010 by slank]