in the 1980’s, i think. the big new york banks loaned big bucks to them and they defaulted. what happened? wall street “securitized” the debt and sold it off as some form of bonds. the bonds were sold at huge discounts and the banks recovered some of their money. ever wonder what those good folks that bought the bonds did? they went to argentina and traded those bonds for farm products, mostly beef. brazil traded mostly tires for their bonds, and mexico paid off in oil.

i don’t believe the inkslingers ever caught on or didn’t consider it newsworthy. see what happens when your currency folds up and you can’t pay debts in a stronger currency? it is possible to pay off your debts by barter (commodities) rather than some other currency if that’s the only way your creditors can get repaid. everyone see where this is headed? fiat will fall out of the loop and commodities will be a form of payment. gold had the distinction of being a currency, commodity, and store of value. few other resources can claim that versatility. we may well revert to a barter system with gold used to settle up the loose ends.
this concept is as old as recorded history. caravans and fleets carried commodities for trade around the world and gold was accepted for value anywhere. the british empire circulated bank notes later but they were backed by silver. a few wars later, the bank notes became fiat.

the fiat lords can never allow a barter system to work. can you imagine hard assets being transferred around and everyone paying their taxes and utility bills in fiat. when the govt employees get paid and try to buy something with a rapidly depreciating asset, they won’t be happy campers. many or most of our politicians in the us house and senate will not run for election in two or four years. they will all give family or health reasons, but the main reason will be the hatred from the folks they represented (and maybe one or two special interest groups).

the old creaky deadwood-at-the-top companies will probably not survive the next several years. the newer smaller companies that can react instantaneously will grow and prosper if they can recognize the new environment they are operating in. the internet will create vast new opportunities in cross border transactions. those countries whose governments are small and encourage commerce will prosper while giant drone armies of government employees will wither.

as the world economies metamorphis, many will suffer while some emerge far better off. we are well on our way. are you going to come out the other side as a butterfly or a worm?

rno