So, how can we make this information work for us?

If Stagflation happens in the US, those who survive and can profit from booming economies elsewhere will mop up the panicked, desperate, and undervalued here.

Here are my hypothesizes:

1) borrow American dollars that you don't need and spend them immediately on building something of value. For example: start a company, hire employees, write software, etc. As the dollar devalues, so does the value of your debt.

2) Build sales and business overseas. Make your business a pump for foreign currency back into the US. Pay for this business with debt described in 1. Use your power and stability to mop up the panicked, desperate, and undervalued here. Think Google during the Tech Bust.

3) Have the power and position to reap the rewards of the next economic upswing.

We could stage a coup and get a US chairman of the fed that isn't in cahoots with the sociopathic corporations. Good luck with that.

Basically, we're screwed. The Project for a New American Century has completely failed, unless you count the trillion or so dollars that have been stolen from the American people and laundered through Iraq.

A coup... a violent overthrow of the government. Do you think that would help the value of the dollar any? People would fight tooth and nail to sell them at whatever they could get.

Please, leave the reddit talk on reddit.

Let's just start assuming that whenever I make a ridiculous, extremist statement that you think is insane that I am being extremist to make a particular point.

A violent revolution would certainly be bad for the dollar. But if we were somehow able to bloodlessly kick out all the evil sociopaths in the government and replace them with individuals that wanted to help society as a whole, that would be very good for the value of the dollar. Unfortunately, this is impossible because of the overwhelming military firepower of the government and what appears to be an inevitable tendency towards corruption in democratic leadership.

Or we could get rid of the fed and go back to free market money (gold). http://www.mises.org/story/2623

Why gold? Why not uranium, or moon rocks, or platinum, or round heavy rocks with markings that resemble the Virgin Mary?

... because historically that's what people have chosen when they were free too. Gold has a lot of properties that make it ideal for money. Doesn't tarnish, separate parts can be rejoined, scarce, hard to get more of it etc. But any object that satisfies all those goals would suffice as money,

>Doesn't tarnish, separate parts can be rejoined, scarce, hard to get more of it

This was important before the Information Age, but now there is no reason to have a lot of physical currency when you can just have ones and zeros. It's easier to use pure energy, the item that embodies scarcity, than something like gold that is much less useful. So it would make much more sense to use oil as the backing currency, or even pure electrical power.

And because it is the information age, it is now very easy to structure your finances so that your wealth rises and falls with the oil price, instead of the dollar. Or gold, or euros, or uranium. Whatever you want. Financial freedom is here (for a fee).

Paul Krugman once pointed out that since the US went off the gold standard, the Consumer Price Index has risen more quickly than the price of gold. In other words, the gold-denominated prices for things that Americans actually buy and sell have been subject to deflation.

"I know we paid you 25 grams an hour for your last six-month consulting contract, but if you want us to renew it, we just can't afford to pay more than 23..."

But then economic growth revolves around new gold discoveries. It would make much more sense to have a currency directly fixed to oil.

You've made the mistake of assuming that more wealth (economic growth) requires a greater quantity of money. It doesn't. Money is just the exchange mechanism. If the amount of gold in the world stays static, but we improve our economies it would just result in prices falling.

If we could not find more gold we could still have economic growth, it's just that the value of gold would rise relative to the goods it could buy. (ie prices would fall)

You can read more here: http://www.mises.org/mmmp/mmmp5.asp

I'm by no means an expert, but a lot of mainstream economists don't seem to abide by this view. They could be wrong, of course, because mainstream doesn't always mean correct, but the burden of proof is on the 'gold bugs'.

> It would make much more sense to have a currency directly fixed to oil.

The price of oil goes up and down too much. People wouldn't want to loan or save a currency that changes value so much. The beauty with gold is the price would be stable, as to date no one's come up with a way of getting lots of it quickly and easily.

I know! Have a currency directly fixed to integers. Say, integers below X, where X is some reasonable granularity for the foreseeable future. There are exactly so many of them, and bank notes already have serial numbers, so it's technically possible! :>

People still keep searching for and mining gold. That was silly two thousand years ago, but they have the excuse that they didn't know better. I read that current methods used for mining gold in some countries (e.g. Argentina) are especially hazardous for public health and the environment of local populations.

You'd have to trust governments to not ever raise X. Because they will, and then you're in exactly the same situation as we're in now.

They can just as well 'unlink' from gold.

Why not cut to the chase and define the joule as standard unit of currency.

That would also work, in theory. It would also future proof the currency against developments that could make oil worthless, though I don't see that happening anytime soon.

At least right now, it makes a lot more sense to trade in an energy containing commodity than pure energy because it's easier and more familiar to people.

Joules are not equal. The sea is full of them. You have to look at entropy, too. A Joule of electricity would be a more practical measure.

Because it wouldn't be portable. Imagine paying for a restaurant dinner with 2 barrels of oil you had to haul over there.

This isn't a hypothesis that we can discuss, just whining.

I'm lamenting to the fact that our unsustainable debt-laden lifestyle is going to end. American is going to lose a lot of wealth as China unpegs its currency.

Leave lamentations for the unwise who didn't foresee the storm and the foolish who foresaw it but did not act.

If this is the way things are, how can we make this good for us?

Invest in foreign countries. India, China, and Brazil are good places to start.

This is impossible for me because I don't have any money, but I think you'd have to be insane to invest a large amount of savings in the US stock market.

I'm making this off the top of my head, but:

What if you borrowed money to start a company and used it to short the American stock market?

The American stock market isn't going to go down, it should keep going up, but it will be losing value because it is denominated in the USD and the USD is falling.