"It doesn't work that way. Apart from Panama which uses the U.S. dollar as it's official currency and a few other small nations, the exchange rates of all major currency is established by the Foreign Exchange market. Just click the links and read the facts.
No major currency is officially pegged to the dollar any more. It hasn't been that way in over 30 years. Whatever you've been reading is long out of date, or it's some nonsense published by gold merchants seeking to swindle you out or your life savings."
MacLorry -
Your understanding of this subject is far to simplistic. The links that you site are quite accurate but they do not conflict with what I am saying in any way. It is obvious to me that you have no idea of what role the worlds reserve currency plays in helping to establish the exchange rates between the currencies.
"The first time I had this discussion on 24hr I posted links to the 10 financial crashes, panics, and disasters that preceded creation of the Fed. Of course, historical facts have no effect on the thinking of true believers, so I won't bother posting that information again. Just think about this; the U.S. was on the gold standard (hard or real money) and had no central bank to create business cycles or mess with the economy, yet the financial crashes and panics were so frequent Congress was compelled to create the Fed. It's that failed system that some now want to go back to becasue those who don't learn from history are doomed to repeat it. Learn your history and you'll realize that what seems like wisdom is really a bunch of nonsense.""
History is very clear on this. Every fiat currency ever devised by man has failed. The average life span of a fiat currency is 40 years. We went off of the gold standard in 1971 and thus as the worlds reserve currency, so did all of the other currencies in the world.
"You say the fed has been unsuccessful, but as with any fork not taken, you don't know what would have happened without the fed's intervention in the economy. It's like explaining what would have happened if we hadn't invaded Iraq to take out Saddam. We can speculate, but we can't know."
I assume you are saying that things might have been much worse if the Fed had not acted. If the Fed would not have acted, there is every reason to believe that our economy would have crashed harder. So to that extent they were successful. However, the country would have been much better off to take our lumps now and get on with a real recovery. All the Fed is doing is delaying the inevitable. Japan was in a similar situation 30 or 40 years ago and also tried to avoid the financial pain needed to recover. As a result an entire generation of Japanese have had to suffer through a lifetime of depressed economics and they are still no better off today.
MacLorry - I have read many of your posts and I am sure that you and I agree on most topics. With that being said, this is a topic where we do not agree. You and I can look at a set of facts and come up with different conclusions. I hope that your vision of growing our way out of this mess is accurate, because I agree that it is probably to late to change things at this point. Unfortunately, this Hope and Change thing hasn't worked out so well.
