A Gödelian Bubble

Following Chris Martenson's demonstration that the Federal Reserve is apparently resorting to buying it's own debt (as China abstains) by simply printing more dollars, Jeff Nielson observes:

It is elementary economics that when you increase the dilution of anything that the value of each unit must decline. Thus, this adds yet another “bubble” to the U.S. bubble-economy: the U.S. dollar, itself. As with all bubbles, the drop in price will be both painful and rapid when awareness spreads concerning the latest U.S. con-game.

Ah, but this would be a unique species of bubble. Other bubbles (dot-com, sub-prime, etc.) involve external assets to which dollars refer. But, what happens when the dollar refers to itself?

The analogy here of a dollar based language of economic value, so to speak, being like a Gödel number based language of mathematics, is a bit contrived. (For one thing, a Gödel number is unique to a given mathematical expression, whereas a dollar amount can refer to multiple assets that happen to be appraised at that value.) Nevertheless, it can be said that we enter uncharted territory when dollars are made to give expression to their own value, much as when a Gödel number is made to represent its own expression, whence an oscillating true/false infinite regression results...

Of course, the physical dollar itself is a thing that can interact with real entities in the world that have economic value. We've heard the expression: "...not worth the paper it's printed on..." But what does the cocaine lodged within its fibers do to its value?

Cocaine on Money: Drug Found on 90% of U.S. Bills