Authored by Nick Giambruno via InternationalMan.com,
“The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.”
Thanks to the fiat currency system, governments at war can tap into a nation’s savings by financing conflict through currency debasement. Under a gold standard, governments had to have the gold or impose taxes if they wanted the funds to prosecute a war. When the gold ran out, the war stopped. But not in a fiat currency system. They can continue debasing the currency until they hyperinflate it.
That’s why there’s a simple equation you should sear into your memory:
The historical pattern is clear.
If the first casualty of war is truth, the second casualty is the currency.
For example, the US money supply (M2) more than doubled during World War I and about tripled during World War II.
During Vietnam, the money supply rose roughly 90%, and during the 2003 Iraq War era, it rose about 65%.
War is expensive.The US government often ends up financing it by going deeper into debt and debasing the currency to service that debt.
How much will the war in Iran cost? Nobody knows the exact amount, but I am confident it will result in meaningful currency debasement.
Source: ZeroHedge News
