the fall of paper money

Ralph Benko, Contributor for Forbes.com

8/29/2011 @ 4:56PM

U.S. Elites Begin To Confront The Paper Dollar

There is nowhere left to hide. America’s governing elites begin to internalize the magnitude of their failure to generate jobs. 

CBO now predicts worse than 8% unemployment until 2014.  America begins to engage, seriously, with the implications of the faltering dollar and reconsider the appeal of the gold standard. From The New Yorker to The National Interest to The Washington Monthly to The Nixon Foundation, thoughts turn to gold. The New Yorker’s August 29 Market Watch, by Talk of the Town deputy editor Nick Paumgarten, celebrated the 40th anniversary of the abandonment of gold and the experiment begun with the paper dollar standard.  The tone? “Don’t let the door hit you, Paper Dollar, Jr., on the way out.”Forty, as anyone who has turned it can attest, is, at best, an occasion for ambivalence and, at worst, a bracing peek over the top of the hill. For its four-decade birthday, last week, Paper Dollar, Jr., was confettied with grim statistics and hooted anew by goldbugs and critics of the Fed. The slide show of P.D., Jr.,’s life, to be sure, features some ugly bits — inflation, recession, rising unemployment, harmful speculations, ballooning debt. The regime of which the dollar is the centerpiece, in its role as the world’s reserve currency, is now teetering. It is a shadow of itself. Stooped and arthritic, it smells of mothballs and can no longer afford its beloved Swiss chocolates. It keeps forgetting our names and getting lost on the way home. Still, the average life expectancy for a fiat currency is twenty-seven years; so, by that measure, the greenback has had a good run.