The overwhelming lesson of history is that when the credit system collapses around a nation's ears, fear and gloom are the only things people can see. No one believes economists, as they disagree on how best to tackle the problem and the result is a run on the credit institutions.
Roosevelt gave his "the only thing we have to fear is fear" speech at such a time and the finance loves him for it in getting America off gold. What he did do though was inspire with confidence and in the end, that's all he had to do. Confidence that the government would not fall thereby backed the [now] fiat dollars and the people got through it but not until the leaders' luvverly war had devastated the world.
It's simple logic - either you maintain confidence in the government or the fiat system collapses completely and the results of that don't bear thinking about. Very difficult in our country to be confident in Gordo and yet Gordo himself doesn't back the fiat pound. If you have goods at home, if your home is yours and if you work on spending within your means, a near impossible thing today, then you will live a frugal lifestyle but survive.
It would help to have some spare cash, of course, to buy up some depressed assets whilst you were there.
Roosevelt gave his "the only thing we have to fear is fear" speech at such a time and the finance loves him for it in getting America off gold. What he did do though was inspire with confidence and in the end, that's all he had to do. Confidence that the government would not fall thereby backed the [now] fiat dollars and the people got through it but not until the leaders' luvverly war had devastated the world.
It's simple logic - either you maintain confidence in the government or the fiat system collapses completely and the results of that don't bear thinking about. Very difficult in our country to be confident in Gordo and yet Gordo himself doesn't back the fiat pound. If you have goods at home, if your home is yours and if you work on spending within your means, a near impossible thing today, then you will live a frugal lifestyle but survive.
It would help to have some spare cash, of course, to buy up some depressed assets whilst you were there.
James,
ReplyDeletePerhaps now is the time to obtain unlimited liability for the banks and bankers with retrospective legislation effective, say, 1905... roughly.
STB.