Worst financial crisis since at least the 1930s “if not ever”–Governor [updated]
The Governor of the Bank of England says the world is facing the worst financial crisis since at least the 1930s “if not ever.” A crisis, he says, calling for more printing of more paper money to buy more government bonds.
So he’s got things half right.
The worst financial crisis since at least the 1930s (“if not ever”) is not a crisis of capitalism, says Detlev Schlicter. It is “the second crisis of socialism.” And printing more bits of fiat money, more bits of coloured paper, won’t solve it.
UPDATE: “Why does the behavior of the Greek government have anything to do with taxpayers in Germany? Why did the original Maastricht Treaty have rules about fiscal policy as part of the criteria for monetary union? The answer is that the euro is a fiat currency… Germany, Slovakia, and the other frugal countries were only in this mess because the euro was a fiat currency. Had it been backed 100 percent by a commodity such as gold, then the Greek government's debts would be irrelevant to outsiders.” – Robert Murphy, “Fiat Money and the Euro Crisis”
Labels: Detlev Schlicter