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REMASTERED VIDEO FOR A PODCAST FROM 2011

The average life expectancy of a fiat currency is only 27 years - from Freedomain Radio, source available at http://www.fdrurl.com/fiatdeath

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Transcript
00:00The average life expectancy for a fiat currency is 27 years.
00:07Every 30 to 40 years, the reigning monetary system fails and has to be retooled.
00:12From Washington's blog.
00:15David Galland notes, Monetary scholar Edwin Vieira pointed out that every 30 to 40 years
00:20the reigning monetary system fails and has to be retooled.
00:24The last time around for the U.S. was in 1971, when Nixon cancelled the convertibility of
00:29dollars into gold.
00:31Remarkably, the world bought into the unbacked dollar as its reserve currency, but only because
00:36that was the path of least resistance.
00:39But here we are, 40 years later, and it is clear to anyone paying attention that the
00:43monetary system is irretrievably broken and will fail.
00:49What will replace it is still unclear, but I suspect that when the stuff really hits
00:53the fan and inflation rages, the government will try the approach taken by the Germans
00:57to end their hyperinflation back in the 1920s, coming up with the equivalent of the Rentenmark,
01:03a dollar that is loosely linked to some basket of commodities and financial instruments.
01:08It won't be convertible, because it would be impossible for bank tellers to exchange
01:12your dollar for a cup of oil and a coupon off of a bond and a chip of gold or whatever
01:17makes up the basket, but it might restore some semblance of confidence in the currency.
01:23That's one option.
01:25Another is that some government decides to make its currency convertible into precious
01:29metals.
01:30But that will only happen when all other less fiscally restraining systems have been floated
01:35and failed.
01:38Simply at this point we can't know what will replace the current monetary system or when.
01:43All we can know is that the status quo cannot, and so will not, survive this crisis.
01:50Regardless, between now and the point in time where the Fed throws in the towel on today's
01:55fiat monetary system, you would have to be naïve in the extreme not to expect volatility,
02:01uncertainty and wholesale financial dislocations.
02:06Chris Mack writes According to a study of 775 fiat currencies
02:12by dollardays.org, there is no historical precedence for a fiat currency that has succeeded
02:18in holding its value.
02:2120% failed through hyperinflation, 21% were destroyed by war, 12% destroyed by independence,
02:2824% were monetarily reformed, and 23% are still in circulation, approaching one of the
02:36other outcomes.
02:39The average life expectancy for a fiat currency is 27 years, with the shortest lifespan being
02:45one month.
02:48Founded in 1694, the British pound sterling is the oldest fiat currency in existence.
02:53At a ripe old age of 317 years, it must be considered a highly successful fiat currency.
03:00However, success is relative.
03:03The British pound was defined as 12 ounces of silver, so it's worth less than 1 200th
03:09or 0.5% of its original value.
03:13In other words, the most successful long-standing currency in existence has lost 99.5% of its
03:20value.
03:23Given the undeniable track record of currencies, it is clear that on a long enough timeline,
03:28the survival rate of all fiat currencies drops to zero.
03:34And Jeff Clark points out History has a message for us.
03:38No fiat currency has lasted forever.
03:40Eventually, they all fail.
03:44BMG Bullion Bars recently published a poster, featuring pictures of numerous currencies
03:50that have gone bust.
03:51Some got there quickly, while others took a century or more.
03:55Regardless of how long it took, though, the seductive temptations allowed under a fiat
03:59monetary system eventually caught up with these governments, and the currencies went
04:03poof.
04:07You might suspect that this happened only to third-world countries.
04:11You'd be wrong.
04:12There was no discrimination as to the size or perceived stability of a nation's economy.
04:17If the leaders abused their currency, the country paid the price.
04:23As you look at the pictures here, you'll see some long-ago casualties.
04:28What's shocking, though, is how many have occurred in our lifetime.
04:33You might count how many currencies have failed since you've been born.
04:38So what's the one word for the thousand pictures you're seeing?
04:43Worthless.