Paul Kimbrel's Musing

My good friend, Mervin, had a comment to post on my “USD” blog entry. There was so much to it, I thought I’d put it out here as a blog entry:

First, I have to say… Yes, Paul is weird. However, I don’t want to minimize his fact and what this means for the world.

In my studies I have found that every money system has a lifespan. The society that uses the particular money system fails through political distress after the lifespan is over.

Every graduation to the next stage is brought on because the society tries to expand both influence and power. In the end, however they overextend themselves and fall. One could make the argument, then, that money is the greatest reflection on the intentions of mankind.

The Four Stages To The Money Lifespan

1. Real Money

   Another word for this is “Commodities”. You will find the world’s natural resources and elements here. This is anything that has a real use, and therefore value, to human kind. It could be something needed to sustain life, like water, or a man made need - such as oil. Real money = Real wealth.

2. Money Standard

   Think of this as an IOU. This money, whether paper or a stick (i.e. Talley Stick), is generally used because of the ease of transporting. It is backed or pegged to real money. Actually, this is probably the healthiest stage because it is easier to do commerce, but the money is still restricted to real money that is in storage somewhere. This is the stage of economic expansion.

3. Fiat Money

   Ah credit, what a wonderful thing. The term “Fiat” just means “By Government Decree”. Of course, another term for this is “Legal Tender Laws”. In this stage “Real Money” is totally disconnected from the IOU. The laws of the Government are the replacement for the “Real Money”. This stage is far more lawful and authoritarian in nature; trying to control money with words alone. It is also the stage of overextension where a “credit bubble” forms.

4. Hyper Inflation

   In the Fiat Money stage, the Government has earned your trust to print what they feel is necessary to sustain commerce. In the final stage, they abuse this trust by over printing the money. The reason for this is to pay off interest obligations from the “credit bubble” formed in the Fiat Money stage. When the society no longer believes that the Government is acting in their best interest, they start to move away from the money system which, in turn, devalues the money and brings an end to the system. The Government might be able to get away with over printing for a while, but once the society “wakes up” to it, the collapse happens very fast.

A money system is one of the most powerful systems of control over a society, but if people understand how money works they can use it as a tool instead of letting it be the master.

Thanks, Mervin!

Remember that chart I put on my “Amero” post showing the decline of US Dollar (USD) against the Canadian Dollar (CAD)? Well, we’ve all but hit parity (1 to 1) with the CAD today. The USDCAD currency pair got down to with in 1.0002. That means the USD is 2/100 of a cent away from being equal to the CAD.

I’m guessing that unless there’s a surge back up, that the CAD will be the dominant currency in North America by end of the day.

One step closer to a new currency…

Never have I been so nervous about posting something in my life. But given the lack of discussion around the water cooler about this, it needs to be known.

It’s amazing that something so significant can get so little press. And yet, it’s something that’s happening right under our nose. The “Amero”. What is the Amero? It’s a (as such) hypothetical currency that would be common between the United States, Canada, and Mexico. It’s similar to the “Euro” in Europe, with the Union to boot (the “North American Union,” that is).

Stomach turned yet?

When I first heard about this, I was skeptical. However, the more I research, the more I find. A simple Google search turns up a wealth of information. The more credible sources still herald the North American Union and the Amero as theoretical. The less-than-credible-but-no-reason-they-would-be-wrong sources are claiming that the currency is already being printed and stamped and the North American Union will be in place by 2010.

The main reason major news sources don’t give much credence to the Union coming to pass beyond the theoretical is the fact that the US Dollar is so much stronger than the other currencies in this new Union. The imbalance would be of little incentive to the non-US countries.

However, if one examines the value the US Dollar has in the global economy over the last 5-10 years, it’s very easy to see some alarming trends.

The US Dollar’s value has tumbled. Tremendously. It’s worth less than the Euro and the British Pound (GBP) by quite a bit. It used to be you needed two British pounds to get a US Dollar. The reverse is now true. The GBP is worth over twice as much as the US Dollar.

Who cares?

Well, let me put it this way. Imagine if you had a million dollars. You’d feel rich! Imagine, now, that you had a million pesos instead. Whoopee! That’s about 90,000 US Dollars. Not chump change, but you certainly couldn’t retire with that.

Bottom line, whatever value you place on the money in your savings account, your 401k, your IRA or any other retirement plan today will mean squat in 4-8 years if the US Dollar’s value drops off the face of the planet. The Amero would do just that.

So what can we do?

Unless Congress puts the brakes on the whole North American Union, I’d say the Amero’s pretty much going to happen. We can prepare ourselves, though. The purists will tell you to invest in silver or gold, or other non-currency based investments. That’s a bit much for Joe Shmoe to swallow, I imagine. However, there are far simpler things you can do.

If you have a substantial amount of debt… get rid of it. Do what it takes to pay off your car, your house, that home equity loan you got when rates were low. And please, please get those credit cards paid off. The less you owe when this all goes down, the less it will effect you. And if I’m wrong, and this whole NAU stuff turns out to just be rhetoric… well, hey, you’ll be debt free.

And don’t think you can’t do it. The only barrier between you and being debt free is your own willingness to cut back on the crap you don’t need. Living in servitude to the monthly payment is merely a mindset. Imagine what you could do if you didn’t owe money. The idea that we have to live in debt is the biggest lie in the “American Dream,” and almost all of us have fallen for it hook, line, and sinker.

Amero Links:
http://en.wikipedia.org/wiki/Amero - Wiki Article
http://www.amerocurrency.com - Anti-Amero Website
http://www.spp.gov - The US office pushing the Union
http://www.nsi-ins.ca/english/news_views/oped19.asp - Op Ed on the Amero
http://www.humanevents.com/article.php?id=14965 (Warning - Conservatives on steroids)

Video Links:
Not much, but this is as close as the mainstream media has come to mentioning the Amero: You Tube Video about Amero