“The best way to destroy the capitalist system [is] to debauch the currency.”

Hate him or love him, the man had a point.

Today’s unprecedented money printing and Lenin’s theory of destroying capitalism reminds me of Roman Empire’s economic collapse.
The Denarius was the main coin (currency) used in the first 200+ years of the empire. When it was created, each coin contained 4.5 grams of pure silver. However, towards the end of the empire, each coin had barely 0.022 grams as they used to mix them with other cheap metals. This, with a combination of several factors, resulted in hyperinflation of more than 1000%, leading to the collapse of the empire.

Fast forward to present time, global central banks are printing money in an unparalleled way, attempting to create inflation to help the economy recover from the ongoing global recession. However, instead of inflating the currencies, major Central Banks have found a loophole, which is expanding their balance sheet and inflating asset prices instead. That is the only reason why stocks are going up when the majority of the world is in recession.
Just think about it, the current market narrative is divided on the idea of whether the US will reach another stimulus package (printing a few more Trillion Dollars) or not. The answer is of course they will, or else the current house of cards will crumble and no one wants that. However, by artificially pumping the stock market up, deficits are expanding to all-time lows, debts are increasing to all-time highs, the middle class is vanishing, poverty is exponentially increasing and the top 1% is getting richer. Very similar to what Lenin described over 100 years ago.

Having said all of that, I don’t think capitalism will be completely destroyed, as I don’t think human beings have evolved enough yet to be able to live in a completely different system! (but that’s another topic for another day🙂).
However, I think a radical reform is necessary and will eventually take place, such as:
- Going back to the gold standard.
- Central banks lose their credibility and cease to exist.
- Most importantly, going back to the ‘Free Market Economy” where the law of supply & demand take back control without any outside interference.