Governments and Money

Submitted by William Bonner, Chairman – Bonner & Partners

Good As Gold

Over the last 10,000 years, humans have tried two different kinds of “money.” They began with exchanges based on credit – “You give me a chicken… I’ll pay you back later, maybe by helping you build a new wigwam.” When society became too large and extensive, they switched to gold and silver.

The advantage of this was obvious: You didn’t have to remember who owed what to whom. You could settle up right away. “You give me a chicken. I give you a little piece of silver. Done deal.”


Image via / Author unknown

Periodically, governments were tempted to go back to credit systems. Essentially, they issued pieces of paper – IOUs – and declared them “money.” Usually, these hybrid systems began with some collateral backing up the paper. Issuers typically had gold in their vaults and agreed to exchange the paper for metal at a fixed rate. Holders of the paper money were told that it was as “good as gold.” Continue reading

The Daily Debt Rattle

Submitted by Raúl Ilargi Meijer  –  The Automatic Earth

Tsipras Scrambles to Find a Way Forward for Greece (Bloomberg)
Europe’s Revolt Isn’t Just In Greece Or Spain (MarketWatch)
Greece Could Run Out of Cash in Weeks (WSJ)
Syriza and the French indemnity of 1871-73 (Michael Pettis)
Democracy Could Have Saved Europe From The Disastrous Single Currency (Hannan)
Sarkozy: Crimea Cannot Be Blamed For Joining Russia (RT)
Merkel Objection to Arms for Ukraine May Spur Backlash for Obama (Bloomberg)
Lavrov: US Escalated Ukraine Crisis At Every Stage, Blamed Russia (RT)
Europeans Laugh as Lavrov Talks Ukraine (Bloomberg)
4 Reasons Stocks Aren’t Soaring After That Stellar Jobs Report (MarketWatch)
America’s Shrinking Middle Class Is Holding On For Dear Life (MarketWatch)
Fears For US Economy As Shale Industry Goes Into Hibernation (Observer)
Bitter Economic Winds Hasten Oil Industry Retreat From North Sea (Observer)
US Oil Rig Count Plunges 29% from Peak. Halfway to Bottom? (WolfStreet)
Bracing for Another Storm in Emerging Markets (Kevin Gallagher)
China’s Exports Slump, Imports Crash In January, Record Trade Surplus (Reuters)
China’s Record Trade Surplus Highlights Weak Domestic Demand (Bloomberg)
Stream of ‘Dark’ Foreign Wealth Flows to Elite New York Real Estate (NY Times)
Twitter Execs Enrich Themselves At Shareholders’ Expense (MarketWatch)
Peak Food Is The World’s No. 1 Ticking Time Bomb (Paul B. Farrell)

Much more here: Debt Rattle February 8 2015 –