What if all the new consensus memes are as wrong as the ones they replaced?
Authored by Charles Hugh Smith: I have the Contrarian Curse, and I have it bad. The
Contrarian Curse is: as soon as the herd adopts your previously
contrarian view, you start questioning the new consensus, just as you
questioned the previous consensus.Example #1: fiat currencies are doomed. After
all, if creating "money" out of thin air solves all our problems, why
not just let everyone print as much as they want at home? Oh, wait, only
the super-wealthy and powerful get the newly created "money"? Oh, that
makes it really sustainable, doesn't it?
Now the hot meme is the US dollar is expiring and gold / commodity-backed currencies will replace it atop the heap. Many of us on the fringes have pondered alternatives to fiat currency, and so this becoming mainstream is a real sea change.
Which immediately arouses my contrarian curse. Ok,
so exactly how does a gold/commodity-backed currency work? If gold or
wheat declines (as measured in purchasing power to everything else),
does the quantity of currency shrink to reflect this decline in value?
Can the currency supply only expand if gold/commodities rise in relative
value? Can the issuing central bank just keep emitting new currency
without expanding the reserves of gold/commodities?
What about
private banking creating new "money" by originating new mortgages and
other loans? What's backing all this new privately-created "money"?