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Topic: Fiat Currency Always Fails - page 11. (Read 2060 times)

hero member
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April 24, 2018, 08:32:50 AM
#89
Politics are structured in a way which rewards politicians for selling out their own values and beliefs in favor of special interests who provide campaign funding and other monetary incentives. No matter which nation on earth we're discussing, its extremely common for the most successful politicians to be the ones willing to sellout the most and whore out themselves for anyone with money and an agenda. Its a race to the bottom and opposite of free markets, competition in politics breeds failure for everyone rather than positive rewards.

What may be needed is some form of restructuring. Removing the degree to which special interests are able to influence politicians with lobbyist incentives, greater safeguards and accountability. We've seen the trend be strongly in the opposite direction of the last x number of decades. The quality of legislation has greatly suffered as a result as we've seen standard of living, education, wages and other metrics fall substantially in recent times.

I don't think there is a way to change this for the long term. Of course, if some responsible, conscientious and dedicated guy comes to power, he can make some changes and improvements (though even his very rise to power seems highly unlikely on its own), but they won't last after he resigns from his office or just gets shot down like Kennedy. I want to say that what is done by one man can be undone by another, and any improvements will be temporarily only. Then they get dismantled, and everything  eventually comes back to where it should in fact be given the human nature. In other words, things you are talking about cannot be changed by issuing a decree or imposing safeguards. Humans need to be changed first.

"Humans need to be changed first." -- No.  The ultimate argument of the establishment, their final line of defense, after their deception has been exposed, is that humans are dishonest by nature, so if the system is dishonest, it only reflects their core nature.  If the system ever gets better by accident, human nature will reverse the progress anyway.

The trouble of this argument is that it's beside the point.  What is required is not human honesty, but human awareness of their *dishonesty.*  If we are aware of the games the elites play with the power we give them, we'll simply refuse to give it.  Taking the power of money from governments and central banks requires no more fundamental understanding than taking economic power from former socialist governments.  It's as simple as understanding that power corrupts.
hero member
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April 24, 2018, 08:19:43 AM
#88

It’s  true that bitcoin is gaining a lot of popularity among the people throughout the world. But it does not mean that the fiat currency are failing. And still I do believe that fiat currency is better than bitcoin at this time because firstly, fiat currency has way more users than bitcoin all over the world. Then fiat currency has way more popularity among the people all over the world. People have a trust in fiat currency whereas there are only limited people who trust bitcoin.

No, of course it's not Bitcoin that suggests fiat currencies fail.  History, and the perverse incentives built into state-issued money, suggest that.
full member
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April 23, 2018, 06:41:11 PM
#87
I mean let's face it, it's easier to handle money electronically than with papers in the hand. And if we compare fiat on the bank account and the blockchain money guesses who have the advantage...well not quite yet, but the potential for the blockchain is huge.

Well ro hold it physically yes fiat is more hassle, but I think if there was no fiat it is impossible for us to come up with the digital money from using goods as our way of payment , we will never come into digital age, without step by step being in that period. I guess the fact Bitcoin is here already, let us keep the fiat for the unbeliever to used, there is no certwin competition for that if both sides were useful.
sr. member
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April 23, 2018, 05:32:26 PM
#86
See:

There Is No Escaping History.  Fiat Currency Eventually Fails.

Notice that this is a critique of fiat money -- not a critique of state-issued money under a gold/silver or other standard.  Fiat money is a rare occurrence in modern history.  (We live in strange times!)  As we can see, the examples found by the author are a small number of short periods here and there.

I have my own critique of gold/silver standards, but that's another issue.
You are completely correct, now the question should be, what we can do in order to protect ourselves when fiat currencies finally fail? And I think the solution is very easy we need to find a store of value, one of the most famous stores of value is gold and while I consider it to be a decent store of value in my opinion is not the best after all you cannot eat or do anything with your gold while if you invested in real estate then you can use that house and that terrain to live there for some time and if you have enough space you could even produce food there in the case things got really ugly.
hero member
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April 23, 2018, 04:40:52 PM
#85
I think fiat money value differ in every state since economic stability and government protocol differs as well including cultural values which is also another factor that affects economy. In my country fiat money does not always fails but like cryptocurrency it does increases and sometimes decreases too. However, the flactuation rate is not as high as bitcoin.
It might slightly differ per country, but the general picture is still the same. It's nothing more than a system that's based on debt and continuous creation of more fiat that's overflowing the economy with long term consequences.

The fluctuations of fiat currencies might not be as severe when you compare them in a direct face to face manner, but if you look further, fiat currencies experience crazy volatility as well, but no one talks about it.

I remember when I was buying stuff from the US (not crypto related) €1 was worth almost $1.40 per conversion, where last year, when purchasing Bitcoin, €1 bought me significantly less than $1.10 worth for a short while.

If these aren't insane fluctuations, then I don't know what is. Bitcoin goes through insane fluctuations in a quick fashion, while fiat does it over longer periods of time, which means that fundamentally, there is no real difference.

These fluctuations of less than 30% over a time span of a few years are nothing when compared with Bitcoin volatility where you can see that much in a matter of days a few dozen times within a single year (not even speaking about other cryptocurrencies). Honestly, I can't even imagine how you can call such fluctuations insane. In my view, they are nothing out of the ordinary, while insane is on order of thousands %% like price first grows 10 times, then falls 3 times all within a few months.

It is in the interest of the establishment to manipulate all price levels to make it *appear* that their issued money has the most stable value.  This has been going on for about 500 years and is nothing new.  The gold and silver standards over the centuries were just very good versions of today's not-so-elegant manipulations.

But don't be deceived.  Hold on to your Bitcoin and gold despite all the ups and downs, and you'll be fine unless you're too old to see the long term.
hero member
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April 23, 2018, 04:37:52 PM
#84
From my perspective, when a currency token (a hard asset like gold or a value token like Bitcoin) is a good store of value, it will impede its application as a means of exchange since people will be incentivized to keep it instead of spending it. In other words, a small and predictable rate of currency inflation is sort of a must-have for a good means of exchange in order to prevent people from excessively hoarding it. Let them hoard deflationary assets like gold or Bitcoin instead (or whatever).

This is one of the key arguments by the establishment, and I'm afraid there is no truth to it.

The issue is never hard vs. soft money, whatever money we use, or whatever money might come out of innovation.  The real issue is always, who has the power to decide?  Who sets the price and value of assets?  When it's the state and not the free market, there will be big trouble.

The real trouble with state-issued money, and especially with state-issued fiat money, is that the central planners have the power.
hero member
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April 23, 2018, 04:33:05 PM
#83
Even if it was perfect like instant and free of charge transactions with no price volatility, it would still remain a poor means of exchange due to its being too good as a store of value. It would be deflationary, and that would make the economy implode.

Yes, going to hard money now would make the economy implode, but how do you answer my point about distortion and addiction?
hero member
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April 23, 2018, 04:26:28 PM
#82
what exactly the author means by saying falling of fiat money? as i read the article it just simply changing the component of the physical money from 85%silver to iron and now paper money, but i dont not see any decrease of its value or purchasing power.. fiat money whatever its form is only have one important role in the economy and that is use to exchange goods and services...

if the author is worried about too much printing of physical money.. it could not happen because too much physical money  could hurt the economy and the country in general. it will only result to inflation...

read this article below.

https://www.americanbullion.com/what-actually-happens-when-a-government-prints-money/

The inspiration for my post was that, through most of the modern age, state-issued money has been tied to gold or silver.  Totally 'fiat' money is a relatively rare occurrence, and when it did occur, it always failed miserably.

Today, we have the historically strange situation where the top-dog money in the world is totally 'fiat.'  Granted, the top-dog country still has a lot of power, but the history of totally 'fiat' money should serve as a warning that collapse might come faster and more violently than in the past.  (That is, all past top-dog countries issuing reserve currencies/debts have been brought down by that issuance, even though the issuance was backed by gold and silver: Spain, the Netherlands, and Britain.)
hero member
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April 23, 2018, 04:19:50 PM
#81

If there are recorded histories that paper money failed a country before but i think these are only few compared to the present day in which these countries that have mentioned are now one of the most powerful economies of today and these was they used money too. Germany, France, China and USA are now belongs to the most powerful nation in talking of military and economy therefore i will not be convince that these are failed countries because they just rely on money.

In the best of these countries, the USA, the dollar has lost at least 95% of its purchasing power over the last 100 years.  So, yes, a fiat currency may not have totally failed yet, but it is only a matter of degree (and time -- since the key financial assets of past global empires like Spain, the Netherlands, and Britain have all been defaulted on.)
hero member
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April 23, 2018, 04:15:02 PM
#80
Indeed, we shouldn't exclude from consideration the cases when a government is made up of criminals who just use their power (this is to the question of the value of power) to steal the nation's wealth. I remember a few years ago some African ruler ran away with the treasury of his country, something like 9 million dollars all in all, if I'm not mistaken. Obviously, I didn't mention these cases as they seem to be self-evident. I'm talking specifically about the cases when government doesn't want to kill their money unless they have no other choice left, like in a war or revolution.

Criminality is relative and varies by degree to a large extent.  Every money issuer is criminal to some extent, and the job of 'wise' Western elites is to ensure the outer-ring countries are always more criminal than those in the core.
hero member
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April 23, 2018, 04:11:00 PM
#79
Agree but still, it has grown at a level where I don't see that people leaving it at least in next 100 years. There will be the people who will keep using fiat currency irrespective of the advantages of other payment systems including blockchain based currencies. The biggest problem with fiat currencies is that there is a centralized power that controls it and it doesn't have any sense of freedom, to be honest. On the other hand, the banking system is soaking all the benefits of the real value of money.

Yes, but the elites taking a big cut of the fruits of labor is a relatively small part of the problem.

The bigger part is the use of geopolitical power to drive conflicts, terrorism and wars, as we're seeing today, in order to force governments and countries around the world to follow Western dictates, that is, do what is necessary to support the value of the fiat money issued by the West.  (Read a book such as 'The Confessions of An Economic Hit Man,' or 'War Is A Racket,' for example.)

That is probably why inflation in Western fiat money is slow and gentle, as you seem to imply.
sr. member
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April 23, 2018, 05:03:27 AM
#78
Politics are structured in a way which rewards politicians for selling out their own values and beliefs in favor of special interests who provide campaign funding and other monetary incentives. No matter which nation on earth we're discussing, its extremely common for the most successful politicians to be the ones willing to sellout the most and whore out themselves for anyone with money and an agenda. Its a race to the bottom and opposite of free markets, competition in politics breeds failure for everyone rather than positive rewards.

What may be needed is some form of restructuring. Removing the degree to which special interests are able to influence politicians with lobbyist incentives, greater safeguards and accountability. We've seen the trend be strongly in the opposite direction of the last x number of decades. The quality of legislation has greatly suffered as a result as we've seen standard of living, education, wages and other metrics fall substantially in recent times.

I don't think there is a way to change this for the long term. Of course, if some responsible, conscientious and dedicated guy comes to power, he can make some changes and improvements (though even his very rise to power seems highly unlikely on its own), but they won't last after he resigns from his office or just gets shot down like Kennedy. I want to say that what is done by one man can be undone by another, and any improvements will be temporarily only. Then they get dismantled, and everything  eventually comes back to where it should in fact be given the human nature. In other words, things you are talking about cannot be changed by issuing a decree or imposing safeguards. Humans need to be changed first.
hero member
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April 22, 2018, 08:59:58 AM
#77
Agree but still, it has grown at a level where I don't see that people leaving it at least in next 100 years. There will be the people who will keep using fiat currency irrespective of the advantages of other payment systems including blockchain based currencies. The biggest problem with fiat currencies is that there is a centralized power that controls it and it doesn't have any sense of freedom, to be honest. On the other hand, the banking system is soaking all the benefits of the real value of money.
Yups,fiat will always remain as medium for payments even in time that cryptocurrency took over the main stream,because for sure until that mentioned years of 100 there will still uses fiats for transactions internet wont be all over the world..thats one thing for sure
hero member
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April 22, 2018, 08:45:41 AM
#76
Inflation prone has proven the case of inflation due to too much money being printed by the government. Things that will lead to chaos and the fall of value of money, although still sells as a means of transaction. Of course, if this happens, the country will suffer enormous losses
sr. member
Activity: 462
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April 22, 2018, 08:30:25 AM
#75
I think fiat money value differ in every state since economic stability and government protocol differs as well including cultural values which is also another factor that affects economy. In my country fiat money does not always fails but like cryptocurrency it does increases and sometimes decreases too. However, the flactuation rate is not as high as bitcoin.
It might slightly differ per country, but the general picture is still the same. It's nothing more than a system that's based on debt and continuous creation of more fiat that's overflowing the economy with long term consequences.

The fluctuations of fiat currencies might not be as severe when you compare them in a direct face to face manner, but if you look further, fiat currencies experience crazy volatility as well, but no one talks about it.

I remember when I was buying stuff from the US (not crypto related) €1 was worth almost $1.40 per conversion, where last year, when purchasing Bitcoin, €1 bought me significantly less than $1.10 worth for a short while.

If these aren't insane fluctuations, then I don't know what is. Bitcoin goes through insane fluctuations in a quick fashion, while fiat does it over longer periods of time, which means that fundamentally, there is no real difference.

These fluctuations of less than 30% over a time span of a few years are nothing when compared with Bitcoin volatility where you can see that much in a matter of days a few dozen times within a single year (not even speaking about other cryptocurrencies). Honestly, I can't even imagine how you can call such fluctuations insane. In my view, they are nothing out of the ordinary, while insane is on order of thousands %% like price first grows 10 times, then falls 3 times all within a few months.
hero member
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April 22, 2018, 04:20:59 AM
#74
Yes.Fiat currency is vulnerable to deflation as it is nowadays printed infinitely and not based on the volume of gold which they hold.A lso if the government suddenly wants to devalue the fiat currency by demonitising as it was done in India,fiat currency would just fail leaving its holders in a misery.
hero member
Activity: 980
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April 22, 2018, 04:13:37 AM
#73
See:

There Is No Escaping History.  Fiat Currency Eventually Fails.

Notice that this is a critique of fiat money -- not a critique of state-issued money under a gold/silver or other standard.  Fiat money is a rare occurrence in modern history.  (We live in strange times!)  As we can see, the examples found by the author are a small number of short periods here and there.

I have my own critique of gold/silver standards, but that's another issue.
It’s  true that bitcoin is gaining a lot of popularity among the people throughout the world. But it does not mean that the fiat currency are failing. And still I do believe that fiat currency is better than bitcoin at this time because firstly, fiat currency has way more users than bitcoin all over the world. Then fiat currency has way more popularity among the people all over the world. People have a trust in fiat currency whereas there are only limited people who trust bitcoin.
sr. member
Activity: 462
Merit: 515
April 22, 2018, 02:21:48 AM
#72
In my view, Bitcoin can exist along with fiat but it can't exist instead of fiat. Such a question has been raised numerous times here, and many distinguished posters, with whom I certainly agree, pointed out that if Bitcoin were to substitute fiat, if purely hypothetically, the economy would quickly come to a halt and then implode. To sum it up, Bitcoin as well as other cryptocurrencies is a bad means of exchange, but this is what makes money into money. 

IMO money must primarily be a store of value.  It is a means of exchange only because it is a good store of value, as no one would take a money in exchange for goods if that money isn't perceived to keep value.

From my perspective, when a currency token (a hard asset like gold or a value token like Bitcoin) is a good store of value, it will impede its application as a means of exchange since people will be incentivized to keep it instead of spending it. In other words, a small and predictable rate of currency inflation is sort of a must-have for a good means of exchange in order to prevent people from excessively hoarding it. Let them hoard deflationary assets like gold or Bitcoin instead (or whatever).

Bitcoin can't be a good means of exchange because the blockchain architecture, by its trust-free nature, has too much overhead to be used in everyday transactions.  But it's this very trust-free nature that enables it to be a store of value.  A world one can envision is where savers hold most of their wealth in Bitcoin, but continuously convert a small portion to/from state currencies for spending.

Even if it was perfect like instant and free of charge transactions with no price volatility, it would still remain a poor means of exchange due to its being too good as a store of value. It would be deflationary, and that would make the economy implode.

BTW, by distinguished posters, do you mean all the top economists who used to praise the gold standard when the elites were in favor of it? Smiley  I would agree that the economy would implode if we somehow, magically transition quickly to a hard money.  But this is only because prices and production levels have been distorted by the modern fiat money inflationary system.  Thus, keeping this system going, because we're afraid of the pain of stopping, fits a classic definition of addiction.

Actually, by "distinguished posters" I meant forum posters like Anonymint or whatever name he had been posting under then and a few other dudes here. I remember heated debates over this question a couple years ago. Or was it four years ago?
member
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April 22, 2018, 02:08:47 AM
#71
 I disagree with you in this regard. Fiat currency is actually the backbone of the current market system and every country around the world has printed a huge amount of fiat currency or paper money backed by gold. Only the inflation in general and hyperinflation in particular in Venezuela in the last years pose a threat to the demand of the paper currency.
legendary
Activity: 2562
Merit: 1441
April 21, 2018, 11:30:36 PM
#70
Indeed, we shouldn't exclude from consideration the cases when a government is made up of criminals who just use their power (this is to the question of the value of power) to steal the nation's wealth.

I love what Ronald Reagan said on this.



Politics are structured in a way which rewards politicians for selling out their own values and beliefs in favor of special interests who provide campaign funding and other monetary incentives. No matter which nation on earth we're discussing, its extremely common for the most successful politicians to be the ones willing to sellout the most and whore out themselves for anyone with money and an agenda. Its a race to the bottom and opposite of free markets, competition in politics breeds failure for everyone rather than positive rewards.

What may be needed is some form of restructuring. Removing the degree to which special interests are able to influence politicians with lobbyist incentives, greater safeguards and accountability. We've seen the trend be strongly in the opposite direction of the last x number of decades. The quality of legislation has greatly suffered as a result as we've seen standard of living, education, wages and other metrics fall substantially in recent times.
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