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Originally Posted by Chan
It wouldn't be favorable to the US; but I'm sure folks on the other side of the pond would love it!
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Indeed. I wonder if this marks the end of our dominance.
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The debt is just one small part of the problem. The real problem is that our economy is a credit-based economy instead of a pay-as-you-go economy. Part of the result of this is that the dollar hasn't really been worth the paper it's printed on since the Federal Reserve took us off the gold standard. When there is nothing backing a currency, the currency is essentially worthless.
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I have never understood exactly how an economy worked, not tied to actual gold, or whatever. A gold standard makes sense to me, as the dollar is respresenting a real value in a transcation, essentially a system of IOUs. Maybe I'm just stupid and simplistic.
I guess we can call this a "faith-based" economy?
