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Currency and its downfalls, how does the economy cope?

 
 
OGIONIK
 
Reply Mon 4 Jun, 2007 09:22 am
How does one deal with a collapsed economy? who takes the debt when an economy fails (like russia inthe 90's)

Does the government in power just wipe the slate cleans and just keep issuing money? i dont get how the monetary systems work even after their flaws are so obviously repeating themselves.

Im not a big fan of "fiat" money, i think thats what its called. I dont see how we will keep currency stable for the future, which will require one to be almost perfect or extremely wealthy not to go into debt.

Can someone explain how the money system copes with disaster?
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mrcolj
 
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Reply Mon 4 Jun, 2007 09:48 am
Your point is just the point. The reason Bush keeps sending anti-UN people to the UN and anti-IMF/World Bank people to the IMF & World Bank is that there is no plan from any of these groups other than free money with no legit strings.

When a country, through its own wastefulness, collapses its entire economy, there are only two things that can happen. They can starve to death, or they can get billions of dollars of free money from the IMF (80% of which comes from the U.S.) It's basically the same thing that happens when Delta or Ford or some other huge company goes "bankrupt." Countries just get free money, with token strings. The problem is, if they get free money for 20 years, they develop a victim mentality and end up hating the U.S. Thus most of South America and the Middle East. Thus Oil for Food and Darfour. That's what they mean when they say, "We put Saddam in power and now we're trying to take him out?!"

The second problem is that, if you put strings on the money, you have to decide which strings. When Bush came into power, one of his first dicta was to abolish the requirement that countries have government-sponsored free abortions in order to get U.S. money. Personally, I'm all about microcredit--tiny loans to individuals, and don't think macrocredit can work.

So, the answer to your question, if an economy collapses, the UN, paid for by the U.S., gives them free money to sustain their currency--which, as any economist in history will tell you, will always backfire.
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OGIONIK
 
  1  
Reply Tue 5 Jun, 2007 01:39 am
lol what a weird forum to put this in...
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