The Fiat Dollar: As Unreliable As My 1971 Fiat 124 Sedan

Forbes ^ | 03/07/2013 | Louis Woodhill

[expat_panama]

...pieces of printed paper which devalue every year...  by agere_contra

...I can still buy beer with it...  by AppyPappy

We all use 'fiat money', even Agere.  Sure, we get lots of talk about some kind of goofy gold standard just like we keep hearing about needing tin foil hats for the black helicopters, but back on Planet Earth the subject goes way down on our list of priorities...

[agere_contra]

Here on planet Earth every unit of fiat currency conceived by the mind of man has eventually returned to its true purchasing power.

Which is zero.

There have been literally thousands of different brands of fiat currency throughout history. The vast majority have completely ceased to exist outside of museums. Among the present batch of fiat currencies not one has retained its purchasing power over the long term.

For instance: our un-backed USD and GBP are both currently depreciating by at least 7% a year. Ouch.

I use fiat currency while people still accept it. But I don’t try to save in it. Neither should any FReeper.

Rather: we should turn our fiat into precious metals and other non-printable assets. If we rely on fiat-savings or fixed fiat income then we are going to become extremely poor.

Sincerely hope this was helpful.

[Robert357]

That's odd, I had a Fiat 124 4-door sedan and then later a Fiat 124 Spider convertible. The engines were entirely different. Both were quite reliable, but required maintenance, that I did mostly myself. The 4-door was a pleasure to work on.

In fact the Fiat 124 4-door tooling was sold to Russia and with some slight suspension modifications (rough Russian roads) became the Soviet Lada.

The Fiat dollar on the other hand has been unreliable.

[expat_panama]

Here on planet Earth every unit of fiat currency conceived by the mind of man has eventually returned to its true purchasing power.  Which is zero...   ...un-backed USD and GBP are both currently depreciating by at least 7% a year...

We can agree that the USD and a few other 'fiat currencies' do have value, and that even if they only kept 93% of their value every year then their value would never reach zero.

All 'ifs' aside, what we got is that in Aug. 2011 $10K could only buy 5.7 oz. of gold, and now it buys 6.1 oz.  In fact, gold's lost over 7% of its value over the past 4 months alone and that's an inflation rate of 24%.  Most of us like using dollars more than unbacked fiat gold.

 

[Jabba the Nutt]

The House GOP is going to fund ObamaCare. There are few in Washington, who are determined to turn the situation around.

This was the last straw. We will not escape without a financial collapse.

My question is how to prepare for this situation: financially and practically. What are sources of advice?

[ckilmer]

Agree that creating a couple trillion dollars from nothing ain’t good.

However, there is this. Fracking creating 50-100 trillion dollars worth of US hydrocarbon reserves and promised oil independence in less than a decade. All that from nothing. That ain’t bad.

By my reckoning these two balance each other out.

This new balancing is the internal reason why gold is declining and the middle east is quieting.

You gotta think of oil gold and the dollar like paper scissors rock.

[expat_panama]

...We will not escape without a financial collapse.  My question is how to prepare for this situation: financially and practically. What are sources of advice?

As scary as it seems, a financial collapse by itself isn't near as bad as it's cranked up to be.  Like, we had one here in Panama a while back and all the banks closed for over a year.  What happened is that everone kept on with thier lives and employees got paid in IOUs that they traded for other people's IOUs and the auto mechanic bought groceries with chits he got from fixing some checkout cashier's car.

The bad part is that the last world wide collapse we had in the first half of the last century went on for decades as the left continued to blame the rich no matter how bad things got.  It didn't end until Europe was in ashes and east Asia was radioactive, only then did people set aside their stupid rhetoric.

[Jabba the Nutt]

Thanks for your response. Now, how many or what percentage of Panamaniums dependent of the government for their livlihood? Street violence? Crime increases? Dollar usage as currency?

There's a guy in Argentina, who writes a blog on surviving in economic collapse. I won't have time for a couple of weeks to research it.

There's no comparison to any other country, if the US dollar explodes or implodes.

[tet68]

I had a Fiat 124 four door and it was a screamer
no top end but acceleration out the wazoo.

[ADemocratNoMore]

A long time ago I had an 850 Spider. The fellow who owned it originally was in the service, bought it in England, had it shipped over and changed it to left hand steering.

You didn't get into it, you wore it like an exoskeleton - big guy little car. With it's 850cc engine (there are motorcycles with engines three times the size) it would still do 90, which seemed a lot faster when you were sitting 12 inches off the ground. Twas' a real fun car !