Loving this quote in today’s "Ed Steer this morning" from the man that is vilified for forcing Nixon to close the gold window in 1971 - Charles De Gaulle:

“Indeed,” he said, “there can be no other criterion, no other standard than gold. Oh, yes! Gold, which never changes its nature, which can be shaped into bars, ingots or coins, which has no nationality and which is eternally and universally accepted as the unalterable fiduciary value par excellence. Moreover, despite everything that could be imagined, written, done, as huge events happened, it is a fact there is still today no currency that can compare, either by a direct or indirect relationship, real or imagined, with gold.”

But let's face it..... in 1971 the politicians were tired of being tied to gold and wanted no limitations to their massive spending habits. Capitalism demands growth and to get growth you had to teach the populous to consume…… and consume we did. They were hell bent on making money a concept instead of a solid gold bar. Politicians had just experienced the Guns/Butter of LBJ's simultaneous war on poverty and Vietnam without too much ill effect. This was further fed by Keynesian doctrine to "spend your way out of debt" and the massive deficit spending by Ronald Reagan to break the Soviet Union and presto.....we had lift off - a purely fiat dollar combined with being the reserve currency of the world. This is an extremely rare and beneficial combination in the beginning that is now turning on us. Americans have become obese, jaded, consuming, unhappy souls – just dying for the next distraction. So this blessing is now in the process of turning toxic.

We earned the status of "reserve currency of the world" on the backs of the U.S. soldiers that fought and won World War II. And every generation since has enjoyed the fruits of their labor. Ironically, these soldiers were forged from the depths of the depression - and came out of it with a hard work ethic, honesty and courage. The biggest victims today of the impending debt collapse will be the younger generation. These children grew up spoiled and pampered - Only to find a third world life style awaits them. Hopefully, on the other side of this disillusioned generation lies another "tough" American generation forged from the next “Greater Depression”.