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Old 11-12-2009, 01:43 PM   #67
watermock
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there is only so much gold it can't be devalued by creating more gold out of thin air like the fed is now doing with the creation of trillions of dollars.
You can only repeat this so many times Baja.

A fiat currency is only as strong as it's economy and debt, and of course, M1, the supply.

Look, there are petrodollars. Ever hear of them? They out number Gold 100/1 or whatever.

Going to run around with a barrel of crude on a mule? Talk about worthless.

There is no real problen with a fiat currency, as long as it has a backing of economy and the promise that the supply won't grow exponentially.

What you WANT is for the money to exchange fast, this is called the multiplier effect.

I there is no faith in the value, people will try to pawn it off as fAST AS POSSIBLE.

This is simple economy 101.
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