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Topic: Why do people trust fiat money? (Read 7467 times)

full member
Activity: 210
Merit: 100
September 09, 2013, 09:31:42 AM
If you could find millions billions of people around the globe to fund standing armies (willing to liberate the oppressed peoples of the world with mighty nuclear missiles of justice) & have thriving economies, and then get those people to back bitcoin, then bitcoin would be as trusted as fiat.  Don't make me wait, Johnyj.

I don't think army is going to make a lot of sense since the invention of nuclear weapon. Now major economies all have nuclear weapon, a large scale conflict is just suicide for any country. People have to solve the conflict with more peaceful way, economy and financial war is becoming more and more popular, it won't cost people's life but still can achieve the same result

I'd like to remind you: Naivete is absolutely adorable in little girls, but for grown men it's as charming as pink bows and a tutu.

While mutual destruction might be a deterrent for war between two nuclear powers, there is no such deterrent for pwning Haxor B0b, who has no nuclear capacity.

Armies make a hellova lotta sense, Johnyj, that's the way IRL works.  The last guy who suggested we solve our problems peacefully got nailed to a cross for lulz.  And he was well-connected -- he was The Son of God.
Ur not the son of God, are u, Johhnyj?
sr. member
Activity: 476
Merit: 250
September 09, 2013, 09:13:49 AM
You still don't answer the question: People do not elect the person that print the money out of nothing, how come they can do this without people's consent?
People elect the people who appoint the central bank governors, and who provide them with direction.
That's not true, you don't have a choice when it comes to money supply, the government can not affect the central bank's decision (at least in western, I think chinese government can). If there is a possibility to elect a government that support deflative currency, people will do
Sure you do.
The UK government sets the targets for the Bank of England, and have normally set a target of 2% inflation.
I want to elect a party that support an annually target of 2% deflation, do I have a choice? No, because all the parties have no idea how money works, so no matter what their political view is, they are not qualified to change the monetary policy

Riiiight. They have no idea how money works.
legendary
Activity: 1988
Merit: 1012
Beyond Imagination
September 09, 2013, 09:12:25 AM
If you could find millions billions of people around the globe to fund standing armies (willing to liberate the oppressed peoples of the world with mighty nuclear missiles of justice) & have thriving economies, and then get those people to back bitcoin, then bitcoin would be as trusted as fiat.  Don't make me wait, Johnyj.

I don't think army is going to make a lot of sense since the invention of nuclear weapon. Now major economies all have nuclear weapon, a large scale conflict is just suicide for any country. People have to solve the conflict with more peaceful way, economy and financial war is becoming more and more popular, it won't cost people's life but still can achieve the same result
full member
Activity: 210
Merit: 100
September 09, 2013, 08:08:39 AM
Johnyj, i bet you didn't vote for 99.99% of the laws on the books either, yet there they are...  Fuckin' magnets, how do they work Huh

People only need to vote for a direction, for example either inflative or delative monetary policy, no need to care about the details. Now we know that inflative monetary policy caused financial crisis and huge national debt in just a couple of decades, I believe many people now want to know how a deflative monetary policy will work for some years. But unfortunately the current political system do not allow such change, because the government is already trapped in deeply

First, let's get our facts straight.  The US dollar has been inflationary for quite a bit longer than "a couple of decades,"  here's a nice inflation chart, starting at 1914, about *a century ago*:



You simply don't understand how money works, and it looks like u refuse to learn.  No biggie, without ditch diggers, poets and composers would have to dig their own.  They thank you for not learning, Jhonnyj.


This has been discussed hundreds of times, give me the right to create money, and I will make sure the CPI stays constant, because I will let all the money go to real estates/stocks/PM, which is not included in CPI

Oh, i get it -- inflation didn't exist 'till a couple of decades ago.  Thanks for clearing that up for me, Johnyj.

Quote
I don't think fiat money need to be abolished, I just want to understand why people trust fiat money, so that we could establish the same trust around bitcoin. If people trust a powerful entity, then maybe we should establish a powerful entity, like some one said, he will back all the bitcoins with his silver holding. If we could find millions of people around the globe backing bitcoin, then the effect will be the same as fiat money, even better, it is not centralized and multi-culture

If you could find millions billions of people around the globe to fund standing armies (willing to liberate the oppressed peoples of the world with mighty nuclear missiles of justice) & have thriving economies, and then get those people to back bitcoin, then bitcoin would be as trusted as fiat.  Don't make me wait, Johnyj.
full member
Activity: 210
Merit: 100
September 09, 2013, 07:56:27 AM
You still don't answer the question: People do not elect the person that print the money out of nothing, how come they can do this without people's consent?

People elect the people who appoint the central bank governors, and who provide them with direction.


That's not true, you don't have a choice when it comes to money supply, the government can not affect the central bank's decision (at least in western, I think chinese government can). If there is a possibility to elect a government that support deflative currency, people will do

Sure you do.
The UK government sets the targets for the Bank of England, and have normally set a target of 2% inflation.

I want to elect a party that support an annually target of 2% deflation, do I have a choice? No, because all the parties have no idea how money works, so no matter what their political view is, they are not qualified to change the monetary policy

Johnyj, do you go by "Cassandra" on other gameservers? Cheesy

(Just to make sure -- the ruling elite don't get how money works, but u & the lunatic fringe do, right? Cheesy)
legendary
Activity: 1988
Merit: 1012
Beyond Imagination
September 09, 2013, 07:55:26 AM
Johnyj, i bet you didn't vote for 99.99% of the laws on the books either, yet there they are...  Fuckin' magnets, how do they work Huh

People only need to vote for a direction, for example either inflative or delative monetary policy, no need to care about the details. Now we know that inflative monetary policy caused financial crisis and huge national debt in just a couple of decades, I believe many people now want to know how a deflative monetary policy will work for some years. But unfortunately the current political system do not allow such change, because the government is already trapped in deeply

First, let's get our facts straight.  The US dollar has been inflationary for quite a bit longer than "a couple of decades,"  here's a nice inflation chart, starting at 1914, about *a century ago*:



You simply don't understand how money works, and it looks like u refuse to learn.  No biggie, without ditch diggers, poets and composers would have to dig their own.  They thank you for not learning, Jhonnyj.


This has been discussed hundreds of times, give me the right to create money, and I will make sure the CPI stays constant, because I will let all the money go to real estates/stocks/PM, which is not included in CPI

I don't think fiat money need to be abolished, I just want to understand why people trust fiat money, so that we could establish the same trust around bitcoin. If people trust a powerful entity, then maybe we should establish a powerful entity, like some one said, he will back all the bitcoins with his silver holding. If we could find millions of people around the globe backing bitcoin, then the effect will be the same as fiat money, even better, it is not centralized and multi-culture

legendary
Activity: 1988
Merit: 1012
Beyond Imagination
September 09, 2013, 07:46:27 AM
You still don't answer the question: People do not elect the person that print the money out of nothing, how come they can do this without people's consent?

People elect the people who appoint the central bank governors, and who provide them with direction.


That's not true, you don't have a choice when it comes to money supply, the government can not affect the central bank's decision (at least in western, I think chinese government can). If there is a possibility to elect a government that support deflative currency, people will do

Sure you do.
The UK government sets the targets for the Bank of England, and have normally set a target of 2% inflation.

I want to elect a party that support an annually target of 2% deflation, do I have a choice? No, because all the parties have no idea how money works, so no matter what their political view is, they are not qualified to change the monetary policy
full member
Activity: 210
Merit: 100
September 09, 2013, 06:41:03 AM
Johnyj, i bet you didn't vote for 99.99% of the laws on the books either, yet there they are...  Fuckin' magnets, how do they work Huh

People only need to vote for a direction, for example either inflative or delative monetary policy, no need to care about the details. Now we know that inflative monetary policy caused financial crisis and huge national debt in just a couple of decades, I believe many people now want to know how a deflative monetary policy will work for some years. But unfortunately the current political system do not allow such change, because the government is already trapped in deeply

First, let's get our facts straight.  The US dollar has been inflationary for quite a bit longer than "a couple of decades,"  here's a nice inflation chart, starting at 1914, about *a century ago*:



You simply don't understand how money works, and it looks like u refuse to learn.  No biggie, without ditch diggers, poets and composers would have to dig their own.  They thank you for not learning, Jhonnyj.

Quote
Your opinion showed that most of the people trust in fiat money because they think that fiat money is backed by the government. It seems that fear and worshipping of a powerful entity still rules
Now you're getting it.

Fear and worshipping of a powerful entity is boys and girls' way of thinking, the grownups usually know how to express their opinion through voting, or even design their own system

In that case, go and vote for the abolition of fiat, but do it soon pl0x -- your "Ban Monyz Nao!" will never pass once Princess Celestia is in office. 
sr. member
Activity: 476
Merit: 250
September 09, 2013, 04:49:59 AM
A good example of worshipping a powerful entity is FRB: If everyone go to bank and withdraw all their savings together, the banks will go bust. But most of the people still believe that their money are safe in the banks because banks have nice house and clerks with good clothing, and there is even a FDIC insurance which is backed by another unknown powerful entity...

People trust it because, for the most part, it has been shown to work.
I had a significant sum of money in the UK branch of one of the Icelandic banks which failed.
Did I lose any money? No, the system worked the way it should.
The UK government took control of all the UK based accounts, and transferred them to another bank, on exactly the same terms as the original accounts.
All my money was safe, and I even got to keep the nice high interest rate.

Of course, if I can create money out of nothing, then all your money will be safe, I just create some and give it to you, and of course I will also create your interest for you. But you are not the owner of those created money, the central banks are, you have to work to get those money

That is just babble.
The answer to the question why do people (in the UK at least) trust fiat is that it has been tested, and it worked.
sr. member
Activity: 476
Merit: 250
September 09, 2013, 04:48:42 AM
You still don't answer the question: People do not elect the person that print the money out of nothing, how come they can do this without people's consent?

People elect the people who appoint the central bank governors, and who provide them with direction.


That's not true, you don't have a choice when it comes to money supply, the government can not affect the central bank's decision (at least in western, I think chinese government can). If there is a possibility to elect a government that support deflative currency, people will do

Sure you do.
The UK government sets the targets for the Bank of England, and have normally set a target of 2% inflation.
legendary
Activity: 1988
Merit: 1012
Beyond Imagination
September 08, 2013, 11:02:44 PM
Johnyj, i bet you didn't vote for 99.99% of the laws on the books either, yet there they are...  Fuckin' magnets, how do they work Huh

People only need to vote for a direction, for example either inflative or delative monetary policy, no need to care about the details. Now we know that inflative monetary policy caused financial crisis and huge national debt in just a couple of decades, I believe many people now want to know how a deflative monetary policy will work for some years. But unfortunately the current political system do not allow such change, because the government is already trapped in deeply

Quote
Your opinion showed that most of the people trust in fiat money because they think that fiat money is backed by the government. It seems that fear and worshipping of a powerful entity still rules
Now you're getting it.

Fear and worshipping of a powerful entity is boys and girls' way of thinking, the grownups usually know how to express their opinion through voting, or even design their own system



legendary
Activity: 1988
Merit: 1012
Beyond Imagination
September 08, 2013, 10:38:48 PM
A good example of worshipping a powerful entity is FRB: If everyone go to bank and withdraw all their savings together, the banks will go bust. But most of the people still believe that their money are safe in the banks because banks have nice house and clerks with good clothing, and there is even a FDIC insurance which is backed by another unknown powerful entity...

People trust it because, for the most part, it has been shown to work.
I had a significant sum of money in the UK branch of one of the Icelandic banks which failed.
Did I lose any money? No, the system worked the way it should.
The UK government took control of all the UK based accounts, and transferred them to another bank, on exactly the same terms as the original accounts.
All my money was safe, and I even got to keep the nice high interest rate.

Of course, if I can create money out of nothing, then all your money will be safe, I just create some and give it to you, and of course I will also create your interest for you. But you are not the owner of those created money, the central banks are, you have to work to get those money
legendary
Activity: 1988
Merit: 1012
Beyond Imagination
September 08, 2013, 10:34:34 PM
You still don't answer the question: People do not elect the person that print the money out of nothing, how come they can do this without people's consent?

People elect the people who appoint the central bank governors, and who provide them with direction.


That's not true, you don't have a choice when it comes to money supply, the government can not affect the central bank's decision (at least in western, I think chinese government can). If there is a possibility to elect a government that support deflative currency, people will do
sr. member
Activity: 476
Merit: 250
September 08, 2013, 05:00:37 PM
A good example of worshipping a powerful entity is FRB: If everyone go to bank and withdraw all their savings together, the banks will go bust. But most of the people still believe that their money are safe in the banks because banks have nice house and clerks with good clothing, and there is even a FDIC insurance which is backed by another unknown powerful entity...

People trust it because, for the most part, it has been shown to work.
I had a significant sum of money in the UK branch of one of the Icelandic banks which failed.
Did I lose any money? No, the system worked the way it should.
The UK government took control of all the UK based accounts, and transferred them to another bank, on exactly the same terms as the original accounts.
All my money was safe, and I even got to keep the nice high interest rate.
full member
Activity: 210
Merit: 100
September 08, 2013, 04:57:07 PM
...
You still don't answer the question: People do not elect the person that print the money out of nothing, how come they can do this without people's consent? Before 1971, there is no need to elect the money creator, since they must mine gold (with lots of electricity) to create money, their work = your work, gold mining is the same as any other work on the planet

Johnyj, i bet you didn't vote for 99.99% of the laws on the books either, yet there they are...  Fuckin' magnets, how do they work Huh

Quote
Your opinion showed that most of the people trust in fiat money because they think that fiat money is backed by the government. It seems that fear and worshipping of a powerful entity still rules

Now you're getting it.

Quote
A good example of worshipping a powerful entity is FRB: If everyone go to bank and withdraw all their savings together, the banks will go bust. But most of the people still believe that their money are safe in the banks because banks have nice house and clerks with good clothing, and there is even a FDIC insurance which is backed by another unknown powerful entity...

If everyone in the world went to the same pancake house at once, they would surely crush each other, or at least make the angels say "WTF?" & point fingers.  It's important to remember that, while this is metaphysically possible, thus far it has never happened.  It also pays to remember that nothing in the world can be conclusively shown to be impossible without resorting to circular arguments, so everything's a game of chance.  
The cool kids work with the odds, but *you* are free to bet against them.

Naivete is absolutely adorable in little girls, but in grownup men it's as charming as pink bows and a tutu.  Just No.
sr. member
Activity: 476
Merit: 250
September 08, 2013, 04:47:44 PM
You still don't answer the question: People do not elect the person that print the money out of nothing, how come they can do this without people's consent?

People elect the people who appoint the central bank governors, and who provide them with direction.
legendary
Activity: 1988
Merit: 1012
Beyond Imagination
September 08, 2013, 04:22:07 PM

Empirical data? Hundreds of years ago, the sun was moving around the earth and the ground was flat from empirical data Smiley

People can not see the truth about fiat money from an end user point of view, but more and more people are beginning to see the truth

If money can be created out of nothing, everyone should create some for himself, why only selected a few can create? Don't you feel strange that you can elect a government but you can't affect the money supply through election?

Johnyj, i can't undo years of misinformation that you've apparently been exposed to, suffice it to say that if what you don't understand about money was a skyscraper, it would immediately collapse under its own weight.  Money doesn't have to be worth anything, it's the map, not the land.  It represents the trust you place in your country.  You have none, thus are a fool to keep using money.  Other people think that their country & its government have some clout, at least more clout then Hax0r B0b, and thus use money.  Money has worked relatively well up 'till now.  If you share the apocalyptic visions of Chicken Little, send me ur monyz before the pale green horse approaches with Death and the Grave riding on its back, k?

You still don't answer the question: People do not elect the person that print the money out of nothing, how come they can do this without people's consent? Before 1971, there is no need to elect the money creator, since they must mine gold (with lots of electricity) to create money, their work = your work, gold mining is the same as any other work on the planet

Your opinion showed that most of the people trust in fiat money because they think that fiat money is backed by the government. It seems that fear and worshipping of a powerful entity still rules

A good example of worshipping a powerful entity is FRB: If everyone go to bank and withdraw all their savings together, the banks will go bust. But most of the people still believe that their money are safe in the banks because banks have nice house and clerks with good clothing, and there is even a FDIC insurance which is backed by another unknown powerful entity...



full member
Activity: 210
Merit: 100
September 08, 2013, 11:42:21 AM
The result of which is inescapable economic inequality1 and deviating malinvestment a result of constant economic growth2.

Again, please break down your thoughts into concise, cogent sentences.  What are you trying to say?

I am highlighting the issues with fiat, if you can't see the causation it may just be ignorance (be happy to discuss over a coffee but couldn't be bothered to do it here.)

1) Cantillon Effect
2) exponential economic growth with finite resources.

Cantillon Effect is a handy catch-all term named after the man who made his money on John Law's Mississippi Company.  If you're arguing that the people who print the monyz benefit more from the process then the ones at the bottom of the food chain, you have no argument from me.  If you're arguing that the people at the bottom suffer losses, or that non-inflationary money is a better alternative, you have not made a case.  

The "Exponential economic growth" argument ignores the population also growing at exponential rate, so the economy growth needs to be exponential to match, to simply maintain current living standards.  Nothing is infinitely sustainable -- see Second Law of Thermodynamics.  Everything eventually ends in tears & fail, the only question is "when?"

Quote
On the issue usury what ever is happening on the lending subforum has more to do with ignorance than economics (and it is and always will be smaller than XBT land's base economy) when it becomes the largest part of XBT land's GDP I'll agree with your view.

So you feel that nothing about this forum is representative of bitcoin economy -- not the usurious lending practices, not the endless get-rich-quick-whoops-onoes! financial instruments, (yep, humor intended) not the toy exchanges & wacky IPOs (now with new & improved IPVOs)?  When are the 4realz fruit scheduled to appear?  The scam/drugz/fail rate thus far just ain't quite the new ambrosia the people are starving for.

Quote
On the environment I don't intended to defend my position[snip!]

Making statements you're not prepared to defend in a debate is pointless.  Pl0x don't.
legendary
Activity: 1372
Merit: 1000
September 08, 2013, 10:38:53 AM
The result of which is inescapable economic inequality1 and deviating malinvestment a result of constant economic growth2.

Again, please break down your thoughts into concise, cogent sentences.  What are you trying to say?

I am highlighting the issues with fiat, if you can't see the causation it may just be ignorance (be happy to discuss over a coffee but couldn't be bothered to do it here.)

1) Cantillon Effect
2) exponential economic growth with finite resources.

On the issue usury what ever is happening on the lending subforum has more to do with ignorance than economics (and it is and always will be smaller than XBT land's base economy) when it becomes the largest part of XBT land's GDP I'll agree with your view.

On the environment I don't intended to defend my position but would encourage you to do a little more research into the mechanism driving consumer cradle to grave consumption habits. Further heating my house used to provided no economic contribution but for the profit to the utility provider, now it supports the provider and the Bitcoin network, in reality the netbenefit is more efficient.
full member
Activity: 210
Merit: 100
September 08, 2013, 09:30:47 AM
Thanks crumbs, I'll admit I don't understand what you think I don't understand (not knowing what it is.)

I'll also agree fiat may be unraveling, and neither I nor Bitcoin can have any hand in it.
For that matter I don't even think fiat requires trust in it to function as well as it does.

The problem isn't fiat in of itself the cause of its unraveling is in the lack of consciousness in its managers.

The fundamental mechanism is the lack of understand in inflating the money supply both through fractional reserve banking and its original creation.

Lack of understanding on whose part?  The money men?  Society as a whole?  Your own?  Please split the run-on sentence above into something more readable.

Quote
The result of which is inescapable economic inequality and deviating malinvestment a result of constant economic growth.

Again, please break down your thoughts into concise, cogent sentences.  What are you trying to say?

Quote
Fiat and FRB have done what history requires and it is time to move on.

When it's time for fiat to move on, it will move on -- no reason for you to worry your pretty little head about it.  Pompous phrases like "what history requires" come off lulzy & hackneyed when couched amidst incoherence & ignorance.  Avoid, pl0x.

Quote
The OP IMO is trying to open eyes to a moral injustice (one you are prepared to accept) IMO only because you don't yet grasp the downside of usury and environmental collapse.

One look at the bitcoin lending subforum is enough to enlighten a rock to the downside of usury Cheesy
As far as environmental collapse, keep in mind that ur posting on a forum dedicated to a money scheme which burns its equivalent in energy, contributing to the heat death of the universe as a whole.  Killing the universe -> Grossly immoral.  Don't rub my nose in it pl0x Angry Cheesy
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