Term of the Day - fiat money
Money which has no intrinsic value and cannot be redeemed for specie or any commodity, but is made legal tender through government decree. All modern paper currencies are fiat money, as are most modern coins. The value of fiat money depends on the strength of the issuing country's economy. Inflation results when a government issues too much fiat money.
The weakness of fiat money is that it is no better than the people who are in charge of printing it - the government. Too much money leads to inflation, and inflation eats away at our purchasing power, so what can we do to hedge ourselves against loss of purchasing power? The stock market and mutual funds have helped, but Wall Street's disregard for a level playing field has compromised that strategy. There are news articles about the fact that Wall Street's lobbyists are fighting to stop more regulation of the securities industry and investment products. The casino is open for business, so place your bets and put your chips on the table.
The very wealthy have turned to fine art. Even contemporary art prices are in the millions of dollars today. How about a balloon dog by jeff Koons? What's the point? When the people printing the money can not trusted to protect the integrity of the dollar, people will find "new money" to take its place.
The Federal Reserve Bank, our central bank, should be concerned with the integrity of the U.S. dollar. However, because Congress will not accept their responsibility for the economy, the Fed gets sucked into the crisis. Congress needs to level the playing field by cleaning up the game. Our professional sports leagues have better control over their leagues than our Congress has over the securities industry and investment products. Get with it Congress, the country is waiting.
Stay tuned.
Posts
2 comments:
Hello, Fred. Nice trip? On a note more reflective of what you have posted - I can't believe that the House and Senate won't understand that we are watching - that we see what they're doing - and if they're truly interested in getting re-elected, they need to be responsive to the needs of those who voted them into office. Of course, I suppose if you put enough money into a man's pockets (which is what the lobbyists are doing - I have to say 'probably', because I have no definite proof)), you can get him to do anything you want, even if it doesn't serve his interests in the long term.
Yes, I agree. I would hope those in Congress will do the right thing for the millions of families that invest in the market.
I listened to President Obama's speech today, but I think it will take some tough people to bring change to Wall Street. I have met some of these assholes and I know how they think, and how entitled they feel.
May the Force be with him!!!
Post a Comment