Common Sense Economics as of October 7 is recognizing the most recent record highs as marking the end of the bull market that started in 2009. Unlike all other bull markets in history this one was politically created and maintained with organized support.
The bear market we are about to experience will be far more destructive than most are currently able to fathom. The coinciding depression may be worse than the one during the 1930s.
Guaranteed, all will hear about the evils of fiat money. Don’t believe it isn’t true. There will be calls to return to the gold standard. Few realized that gold certificates were fiat money also. How is that? They were redeemable in only one commodity and government controlled the price. Regular fiat money is also convertible into gold but government doesn’t control the price. It can also be converted into anything else. It is more accurate to call it deregulated money.
So, what is the problem? Governments cannot maintain stable currencies. Why? Governments can’t make economic decisions. They make political decisions so the amount of money in circulation always reflects the needs of the politically elite. The gold standard was constantly tampered with politically. The asset bubbles of the 1920s were directly caused tampering with the gold backed pound following WWI.
Money creation gets out of hand because citizens are unwilling to control government. Chances are good that within the next 50 years a new currency will emerge in the private sector. There is no chance a government will sponsor a trouble free currency. In all of history it has never been done.