Cartoon 656: What is Money?

The dollar has no intrinsic value other than the value of the paper it is printed on. The value of the dollar is as a “fiat” or article of faith.  Wall Street plays a key roll in this valuation. Wall Street is faith built on faith. What has happen recently is a domino of that faith stumbling. The domino is Wall Street. The worry is that other articles of faith might fall as a result.

The article of faith on the table is the American way of capitalism. Already countries around the world are saying they are no longer going to be acolytes following the American way.

I have said it repeatedly that American real power is not its military. American power is it economic prowess. The military is an affordable corollary. As a result of the American financial crisis other nations will see it in their interests to build a “firewall” to lessen the impact of an American crisis. They will be actively developing and seeking new markets. These other nations and international businesses are going to be looking very closely at how America responds to the crisis. They are going to be assessing the continuing risk. There is a growing chorus in the world wondering rather America is really wealthy enough to do what it has indicated it will do. That brings up the question of responses to other pressing problems such as infra-structure, the continuing wars and social security