From an investment newsletter:
The global economy is going to boom this year, powered by soaring money supply and robust public sector deficit spending. Over the next few years, the world is going to relearn a very painful lesson about paper money and public finance.
In short, paper money is inherently unstable because paper systems don't restrain lending or spending with savings. When reserves can be printed, why bother with the pain of saving money? Untethered by any market discipline, sooner or later every paper system collapses under the weight of its accumulated debts and the resulting inflation.
Likewise, when a political system (like ours) promises voters more in benefits than it collects in taxes... trouble is only a matter of time. Combining the two systems ? a democracy with a heavily progressive income tax and a paper money monetary system ? is a recipe for a massive financial collapse. And make no mistake, that's exactly where we are heading.