The History of Paper Money
Paper money is a fiat currency if not backed by an asset, usually gold or silver, that retains its value. The US Dollar is a fiat currency, backed by nothing.
A study was done on the history of 775 fiat paper currencies. Not one of these currencies was able to hold its value since the advent of unbacked paper money.
The study showed that 20% of paper money failed through hyperinflation, 21% were destroyed by excessive spending on wars, 24% had to be reformed, 12% failed by other reckless government spending, devaluations, price controls or other regulations and 23% are still in circulation today and approaching one of the aforementioned outcomes.
The report further showed that the average life expectancy of unbacked paper money is 27 years. The US Dollar was removed from its gold backing in 1971. Immediately inflation raged and interest rates shot to 21% in 10 years. Price controls were put on most goods but failed and removed. The dollar was then devalued causing more inflation. The Federal Reserve has now artificially lowered interest rates to nearly zero. This is causing educated people to buy gold and silver with their paper money to retain value.
Sadly, most of the voters and government officials are paying no attention to what history tells us. President Obama says nothing about the problem and continues to advocate more spending. The Republican Candidates for President ignore the paper money problem except for Ron Paul, but less than 20% of the voters pay any attention to Paul.
The unbacked US paper dollar has struggled on for 41 years, way above the average life span of paper money. All the while banks are failing, the fed is printing money and buying up bad debt, housing values have fallen, unemployment is high, the debt is rising and government is in grid-lock. Wake up Americans, you’re been asleep for 41 years.