Have You Caught Gold Fever? The Value of That Shiny Metal Is as Artificial as Paper Money
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"The massive bailouts, stimulus packages, giveaways and short-term debt, along with imperial wars we can no longer afford, will leave the United States struggling to finance nearly $5 trillion in debt this year," explained war correspondent Chris Hedges, in his recent article, " We Stand On the Cusp of One of Humanity's Most Dangerous Moments." He continues:
This will require Washington to auction off about $96 billion in debt a week. Once China and the oil-rich states walk away from our debt, which one day has to happen, the Federal Reserve will become the buyer of last resort. The Fed has printed perhaps as much as two trillion new dollars in the last two years, and buying this much new debt will see it, in effect, print trillions more. This is when inflation, and most likely hyperinflation, will turn the dollar into junk. And at that point the entire system breaks down.
What it specifically breaks down to is still unresolved. Hedges, James Kunstler and many others believe the United States will devolve into a militarized, nationalist dystopia, a scenario that is less far-fetched by the day in the era of puppet ciphers like Glenn Beck and Sarah Palin. The technological optimists at Wired believe we'll transcend the bonds of these material fiat currencies and go further hyperreal, firing electronic payments by iPhone via Twitter and other virtual value systems.
"The Future of Money," Daniel Roth's story for the March issue trumpeted, is "Flexible, Frictionless, and (Almost) Free." Hoarding stores of physical gold in a new century filled with environmentally and economically aware citizens sustainably exchanging real-world goods and services, while paying for them with electronically notional currencies plugged into a value system unhinged from an Earth whose natural resources are shrinking by the day, looks less attractive by the minute. In fact, it looks like the past, not the future. And we all remember the past, don't we? Not pretty.
To avoid the dystopia and nail the utopia, we're going to need to admit that arbitrarily assigning value to something that is comparatively worthless to us all is so last century, be that dollars or gold. Our fundamental concept of value has changed altogether, whether we like it or not; in fact, it is the only silver lining to the Great Depression rerun. What did Marx say about history repeating itself twice?
Well, the farce of fiat currencies and precious metals alike is almost over. Yes, we know the Fed has been suppressing the price of gold, because we know it also has been propping up the dollar. That is, after all, its job. We know Goldman Sachs and other hive-minds for mathematics Ph.Ds, proprietary algorithms and carnival barkers have been gaming the gaps between these real and notional values, at the expense of our republic's integrity. But we've paid them billions more for it anyway, which is lunacy: Exploiting the stress fractures in economics' clumsy house of cards isn't intended to fortify it. It is intended to destroy it, and it has succeeded brilliantly.
What's left now for us all is to collectively chart currency's 21st-century upgrade with honesty, solidarity, and yes, transparency. We've wrecked the shit out of our chosen currency for the 20th century, as Chris Hedges has explained. Once the casino changes its membership rules and admits China, Brazil, India and more world citizens into the party, the pie will necessarily shrink if it's allocated in real value. But if we want notional value to survive the 21st century, we're going digital or going home to our makers.