On 2011-06-12 8:53 AM, Nico Williams wrote:
A fiat currency with no capital controls and reasonably free trade is probably the best currency system yet. Details do matter though.
If operated by far sighted men with an eye for the long term - for example if operated by a hereditary monarchy.
Operated by the current lot of crooks who can scarcely see as far as the next election ...
Fiat currencies are subject to wild gyrations, which gold was not. > Which isn't to say it will
continue, but if it doesn't, it won't be due to any flaws in this currency system.)
I would say that giving total power to the people who brought you affirmative action lending is a flaw. The people operating the system are printing money to benefit cronies and voter blocks.
Greece is going broke from too much vote buying. Governments are reluctant let Greece go broke, for fear of contagion. So they lend the Greeks more money, which is another form of contagion.
That governments keep bailing out Greece is a sign of weakness and fragility. They fear that if Greece goes, then the next weakest government will go, and then if the next weakest goes, then the one after that, the dominos falling all the way to Washington.
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