Economic Disaster

I was talking to Siew last night about the situation with the economy all over the world and I thought of something that I pointed out. I want to share what I thought of and I want people to comment, if you want, maybe you've heard of this before somewhere, I do not know.

Ok, here's what I think is a major part of the problem with money as we use it today. Money is supposed to have hard-currency backing. This means the government is supposed to have gold and silver somewhere to back the money they use. Right?

Well, there's a problem with that. Population growth.

For example: we started out with 100 pounds of gold and that had money passed out to 100 people who worked for it. Now, those people all have children, we'll say 3 each, so now there are 400 people. Give it 18 years or so and they're all working. Some of them worked digging up more gold and silver, but not enough did so.

Now we have 400 working people, and maybe 150 pounds of gold. Previously one pound of gold per person was not so bad. Now, with the children of these people, there is 0.375 pounds of gold per person.

Every generation it just gets worse. We're at that point now, with all of the currency in the world, how can we have enough of what is supposed to back it to make it worth anything?

Using precious metals as a base for currency doesn't seem to work.

Siew suggested that the only solution is to go back to bartering, I think she's right about that. There's only one thing, that I can think of, that will increase with the population that could back currency (other than human lives that is!), that's information. But how do you put a value on information so that it can be used as currency? I do not know.

That leaves barter and barter of information as the global fall-back when the system as it is now collapses. I'm pessimistic about things on our planet as they are and I don't see a way for it to NOT collapse.

Even if everyone in the world declared bankruptcy and everyone forgave everybody else's debts, it still would be enough. You still have the foundation of the system the same. The system is the same. Nothing has changed, all you've done is a global reset. It'll break again, faster next time as the population increases, yet again.

It may not start with the USA, but that juggernaut of capitalism is going to fall. I am from there and I am 99.9% sure that there is not enough hard currency to back the paper and electronic money out there. This country is going to fall in a horribly big way. "The bigger they are, the harder they fall." Well, the USA is big, fat, lazy and really stupid as it is now.

Maybe we'll be rescued by aliens. They'll swoop in at the last minute and help us stabilize and present us with a solution that makes so much sense even the most bull-headed people will accept it.

Maybe.