Role Model ± Greece or Switzerland

"The more stable the currency was, the more stable society would be ± And the more successful as well." ± Matthew Lynn, quoting Friedrich Hayek in Lynn's new book, BUST

Paul Richardson June 22, 2011

How bad is the crater Greece has fashioned for itself with its entitlement promises? The chart below shows the result if you had invested $10 Quadrillion in Greek currency in 1900 it would be worth less than a dollar in 2000.

The other ³limit example´ is Switzerland. Had you invested $10000 in the Swiss Franc in 1971 it would be worth over $50000 today without considering interest reinvestment. This validates Hayek¶s assertion that stable currency leads to stable and successful societies.

The contrast is startling. How does the U.S. fit into this picture? Well, a dollar in 1970 is worth eighteen cents today. But we continue to hear that Keynesian economics is the answer. I would say show me the evidence. Hayek and Friedman were right but it doesn¶t fit the political desire to create a dependent populace (bread and circuses) that is tied to government handouts so that the government¶s control is in an increasing upward trend.

This is a fool¶s game and it is time to wake up and face reality. You can easily see how well ³kicking the can down the road´ has worked for the Greeks (and us). The problem gets insidiously worse as long as the ³pain´ of fixing the problem is avoided. People seem to think the reality can be avoided forever. NO! And the pain is greater the longer action is postponed.

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