Sunday, April 15, 2018

Iranian people learn that ALL fiat currencies are worthless crap

Iran's fake money is called the Rial.  Of late it has been plummeting against the petrodollar. It is officially down by 33% in just seven months and unofficially (black market trading) it is down by more like 50% in that time frame.  That is a life changing loss of purchasing power for people whose retirements are stored in the fake money.  In response the Iranian con men (AKA politicians and bankers) have gone back to the fake money playbook and instituted capital controls.  In other words, they prevent people from moving their savings from the fake money into something else.

If you look at the details of all of these kinds of collapses they are all the same:
- Government is inflating the money supply in order to meet the otherwise un-payable obligations (promises) that they signed up for in order to either get elected or to be allowed to stay in power.  Each unkeepable promise requires the printing of new currency and the taking on of new debt in order to maintain the perception that the lies are truths.

- No Ponzi runs forever.  First they show signs of cracks and then the floor evaporates and the purchasing power of the fake money begins to head for its intrinsic value of zero.  Once people see this happening, they try to flee the currency.  Government liars put a bold face on it and then blame external enemies for the decline.  But the decline has nothing to do with enemies.  It has to do with the people simply avoiding their own fake currency.  The smart ones find some way, any way to convert it into something else that they think has value. 

This is the Von Misses crackup boom, that which Austrian economists know is the eventual fate of all fake money regimes used to fund Keynesian madness.  You can read on and on from endless volumes of complexly written monetary theory or you can simply listen to the simplified version that I have been warning about for many years now.  Folks, the money is fake.  It is not real.  I don't care if you are talking dollar, rial, yen, euro or yuan.  None of it is backed by anything.  All of it was conjured as debt based money from thin air.  The result is a debt Ponzi and no  Ponzi ever lasted forever.  A crackup boom is just another name for debt Ponzi collapse.

- The marginal players are hit first and worst.  Venezuela is now what I would have to call a failed nation state and civil war is no doubt brewing there.  I don't know who will be next or how long it will take but all nations that use fake money will at some point be faced with the fact that their own people have lost confidence in the fake money con and when that happen the con collapses because without confidence of Mark and Patsy there is no con game.

The only way to avoid getting bent over the barrel by corrupt government and their debt Ponzi is to put ALL life savings in gold and silver bullion coins.  In Iran or Venezuela, do you think gold and silver holders have gotten screwed by the collapse of the fake money?  Oh sure, they have to suffer product shortages and the violence of other stupid people who did not move to gold and silver when they had the chance (and are now thus very angry and violent about it).  But they have options. They can leave and go someone else because they still have money to spend.  The purchasing power of gold and silver metal holders remains intact even as Venezuelan fake money craters.

Get your life savings into gold and silver coins while these things, real money, are still considered "risky" by people who know nothing about money but who think that their ignorant  opinions count anyway.  Gold and silver can be volatile but they will never go worthless and at some point it will be recognized (again) that they are the only real money on the planet.  Ours is certainly not the first generation to have re-re-re-re-re-re-learned this obvious lesson.  The fake money con game is not new but it has been brought to a new level of scariness by the fact that the entire world is now at risk of collapse from this con.  There is hardly a safe haven anymore.

Iran will not be the last country to see hyperinflation.  It will be joined by many others in the coming years.  Hyperinflation is just the con game's way of saying that people are getting wise to the con of accepting fake money in exchange for their labor as if it had any value at all.

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