A picture is worth a thousand Krugman essays, which is why we present a chart comparing the US Monetary Base (and by subtracting Reserve Balances with Fed Reserve Banks, Currency in Circulation), and the Fed's holdings of MBS and Agency paper (worthless GSE/FHA garbage). In summary: Currency in Circulation: $920 billion; MBS/Agency Holdings: $997 billion. The dollar in your pocket is now entirely backed only by worthless, rapidly devaluing and subsidized housing.
"Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
Bah. The dollar is backed by the full faith and credit of the US government, with its ability to extract reveneues from a population of 300 million and its several thousand nuclear weapons.
Those who think the dollars is worthless, please send your worthless dollars to me. I'm sure I can find a use for them. Peak oil is not an energy crisis. It is a liquid fuel crisis.
Bah. The dollar is backed by the full faith and credit of the US government, with its ability to extract reveneues from a population of 300 million
Unfortunately the tax base of the US, and most other jurisdictions, is founded upon the taxation of earned income, which is disappearing fast down the toilet as the productive sector shrinks. The Left swallow this idiocy because they know (having read their Marx) that all value comes from Labour. It suits the Right, on the other hand, to go along with this bollocks because it is entirely consistent with taxation of earned income - rather than the unearned income derived from the privileged property rights of those who own the US.
If a large part of taxation were in fact derived from the use value of land/location - as it is in (say) Hong kong and Denmark, where up to 30% of taxation comes from this use value - then the US dollar could indeed be correctly thought of as land-backed. "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
What happens to Wall St when it has bled the rest of the US dry?
