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Originally Posted by raab
These two statements are monumentally false.
First off the Government of Canada goes into debt when the Bank of Canada prints money. This did not start until 1974 when P.E Trudeau sold the Bank of Canada to a private interest. So if the government wants to put an additional 100M into circulation they pay the interest on that 100M, where as before 1974 they never did. Also with fractional reserve banking. The banks can lend out money at 20-1 vs their deposits. They basically have a license to counterfeit money. It's unbelievable and resulting in a declining middle class. It's no surprise though, as Keynes quoted Lenin as saying the best way to destroy capitalism is debauch the currency. In other words inflation hurts the middle class, keeps the poor, poor, and benefits the rich who can buy assets at depleted prices. It's the easiest way to a totalitarian government as it reduces competition.
As for our money being backed by gold. Its the furthest thing from the truth. Our money is backed by nothing. And at any point we could see hyper-inflation which would basically ruin the middle class.
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In a hyper inflation environment, like could happen in a few years if Tater Tot keeps going the way he's going, it's better to be in debt, rather than to have savings. This is with the proviso that the debt accumulated was for things that could help one get ahead (such as growing food), or for assets that hold a steady buying power (precious metals, bullets and guns), or things that one can make money with (raising and selling food).
A fellow I know from Argintina saw how things were going and bought all the gold he could buy with all the money he could borrow. He just paid interest on these loans, until the Argintine currency collapsed. Then he paid the load back. He told me that the amount that he borrowed for an oz of gold was the price of a pack of cigarettes the day he paid it back... How far would saving that cash in the bank have helped you??