Topic: Ron Paul on Bitcoin: "The dollar has lost 97 percent of its value..." - page 3. (Read 3762 times)

The problem is when it has no value. All paper currencies become completely worthless within an average of 27 years.

So a currency can survive hundreds of years if it becomes a receipt that is redeemable for less and less amount real money.

But once it stops being backed by real money at all, a 'fiat' currency it's game over, completely worthless within 50 years.

FRB isteslf is not bad, as it serves as a mechanism to organize capital.

However the allocation of FRB dollars is very bad, because banks have a monopoly and as we have seen are taxpayer backed.

So the generally siphon of all value from you to them, and are not exposed to market forces/diciplien, rather you are on their behalf.

FRB by central banks lacks any form of competition.

To put it one way, if fiat money was valuable, you should be allowed to counterfeit printed money perfectly,

why cant you, because this would inflate the currency, but that's good as it shows the paper is worthless. Go ahead try and counterfeit BTC.

counterfeiting is a public good because is exposes the currency and economic system to market forces

BTC has actual value even in that.

If you photocopy a GBP note then it would be a worthless counterfit. Like any currency inflation has decreased the value of the British pound. If you were to measure a the british pound (or any other major currency that has been around for 200+ years) by what it buys in terms of standard of living then inflation has not taken as bad of an effect. In other words, if you were to live the same way that one lived 100 years ago, then it would not take that much more money to have the same living standards.

It's what a lot of people think. They think 'Oh the pounds been around for ages' but NO, The pound used to backed by real money - originally a pound of silver & since then it's backing has progressively decreased. Around 1940 it was pegged to the $ but at that time the $ was still backed by gold.

It was only in 1971 when Nixon said 'Oops we don't really have the gold' that the $ & by extension all currencies pegged/linked to it became just paper.

The $ has had a good run, the average life expectancy for a paper currency is only 27 years & the $'s been going for 45.

But it's been partly backed by the 'petrodollar' meaning a lot of oil producers agree only to sell their oil for $ thereby keeping demand for $ high. However when Saddam Hussein decided to sell Oil for Euros they had to go attack him to keep everyone else in line, same with Libya, he was about to start selling Oil for a new gold backed currency he was creating. It's getting a bit messy there though, trying to install and keep $ favourable leaders in power as well as create believable excuses to attack them.

If you want to know why bankers & Government love fiat currency it's because controlling the money supply and rates let them extract the wealth from the population. (See how their fortunes used to be tied directly to the private sector) till after the fiat transition followed by deregulation in the seventies...

But when it stands for one pound of sterling silver, and then doesn't and is worth 0.5% of a pound of silver, then is it really the same currency?  If I photocopy a GBP note, is it still a pound?

Inflation in the UK has caused the british pound to lose value verses the value of silver. It is still the same currency, as if you had a bank note from several years ago you could still tender it for payment today.

To my knowledge it was called the 'pound' (short for pound sterling) precisely because it had no silver backing.

It's somewhat akin to calling snack foods 'cheeze doodles' even though they have no cheese in them(note spelling ).

-bm

ok, how long has the fiat pound been in circulation?

Exactly. Calling it the same name does not mean it is related to the original currency in any important way. Just another soon to be worthless fiat currency. 

Just no. The pound is no longer a pound. It is now a fiat currency. Accordingly, the fact that there is still something called the pound in monetary use, cannot be used as an example of a fiat currency lasting a long time.

I think you are confused as I wasn't responding to anyone saying it was dead or not, just about why it was called a pound.

One pound of silver that used to cost "1 pound" now costs about 200 "pounds".  For all intents and purposes it is worthless in comparison to its original self.

Interesting in the UK that there is a study stating that 97% of money was credit (FRB money).  Seems like all the decline to currencies is related to private banks creating money out of thin air.

Granted the central banks also do print money but it's a trivial amount compared to how much money is made cooking the books and lending out money which doesn't exist.

These banks are all "too big to fail" (interconnected) and essentially own each other's money - so I don't see the system coming down anytime soon, unless there's some global bank run and the results of that would be catastrophic (it would be equivalent to an EMP attack).

still, it seems the pound is still around, so people that say "every fiat dies" aren't being totally accurate.

Good question.

A pound of sterling silver.  So a pound of silver today would cost about $340 ($21.25/oz* 16 oz).  The pound is not worth $340 US dollars. :-)

A loaf of bread in 1900 cost about $0.07.  In 2014, about $2-$4 (depending on the loaf etc).  It happens gradually so people don't notice overnight it going up so dramatically from $0.07.

:-)

Something to ponder: why is it named the 'pound'?

I like it

Hasn't the british pound been around though, for hundreds of years?

Agreed, the problem is that no one can convince the aristocracy of that fact. Those of us "in the know" can only keep protecting ourselves by getting our wealth out of fiat currency.  

All fiats die..all fiats die.....btw all fiats die!!!

 Dollar is in decline and will eventually disappear . It may well take a few decades for that.  I suspect cryptos whether bitcoin or Government/ financial Institution created will replace all fiats over time as they are just BETTER in so many ways and less expensive to use.


"Every 30-40 years the Reigning Monetary System Fails and has to be retooled"

http://georgewashington2.blogspot.com/2011/08/average-life-expectancy-for-fiat.html

According to a study of 775 fiat currencies by DollarDaze.org, there is no historical precedence for a fiat currency that has succeeded in holding its value. Twenty percent failed through hyperinflation, 21% were destroyed by war, 12% destroyed by independence, 24% were monetarily reformed, and 23% are still in circulation approaching one of the other outcomes.

The average life expectancy for a fiat currency is 27 years,