Monday, January 5, 2009

Here's a scarey but prescient observation...

... and a short post above the monster immediately below.

I'm reading historian Niall Ferguson's highly regarded The Ascent of Money.

After discussing how the Spanish screwed up in the 16th Century by minting too much money, leading to massive inflation, Ferguson writes this passage on pp. 27-28

"In God We Trust" it says on the back of the ten-dollar bill, but the person you are really trusting when you accept one of these in payment is the successor to the man on the front (Alexander Hamilton, the first Secretary of the Treasury), who at the time of writing happens to be Lloyd Blankfein's predecessor as chief executive of Goldman Sachs, Henry M. Paulson Jr., When an American exchanges his goods or his labour for a fistful of dollars, he is essentially trusting "Hank" Paulson (and by implication the Chairman of the Federal Reserve System, Ben Bernanke) not to repeat Spain's error and manufacture so many of these things that they end up being worth no more than the paper they are printed on.

Ooops. Shit.

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