As the world political situation continues to deteriorate towards something I think will vaguely resemble World War III, the chances are excellent that a U.S. government at the end of its financial rope will default, likely by radically devaluing its dollar. They're way past thinking in millions. They don't even think in billions anymore; they're up to trillions. Soon Obama will have to ask the buffoon he appointed as a science advisor what comes after trillions. Those nice foreigners who gave Americans physical wealth in exchange for pieces of paper are going to find that, indeed, all they got was a bunch of paper. Maybe not even that, but just ledger entries representing pieces of paper.
It's not just the Chinese and Japanese governments that are going to be unhappy. But hundreds of millions of individuals around the world – in places from Russia to the Congo, to Mexico, to Thailand – that have a trillion of the things under their mattresses, because they justifiably don't trust their own government's paper, are going to be even more unhappy with the U.S.
This is big trouble.
Big trouble indeed. The government is playing a dangerous game. The fiat money experiment is almost over and the aftermath will result in chaos.
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