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JoeS
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Fiat Money – Eastern Europe

- Alan Leishman -

First person experiences are always interesting! What frustrates me about articles that talk about "fiat money" is that they usually never discuss the causes of the failure other than to say the government just prints a lot. They also use terms like "currency" to describe coins! In 1792 the money was coin only. The comment above "President Thomas Jefferson sought to create a national currency to supplant the various state, local and private currencies then in use." doesn't fit with the 1792 Coinage act. Paper money is prohibited by the Constitution (read James Madison's notes on the COnstitutional Convention 'Bills of Credit'). "Currency" is a note that is "current" and payable. It is NOT script like the paper money described above. Money is "Fiat" because the government declairs it to be money by fiat. Not because it is made of paper. A silver certificate that is redeemable by contract is NOT "fiat" money. Back to the cause...All of the paper "money" systems fail because they are created using debt. When the debt is paid the money is then destroyed. HOWEVER, the money to pay the interest on the debt is NOT created and requires the issuance of more debt to pay the accruing interest. Eventually the compounding of the interest makes the debt burden too great to support. This causes all sorts of economic dislocations and the attempts to keep the system functioning causes hyper inflation and the eventually descruction of the "money". The governent does not just print the money, They BORROW IT from the BANKSTERS who either print it or, like in the U.S., they print it, give it to the BANKSTERS and then BORROW IT BACK! Insanity! Not to mention criminal.

Commented 4354 days ago

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Beginning of the headline :Most commentators on how Fiat money always reverts to its intrinsic value, (i.e. approaching the value of the paper it is printed on, or near zero), quote the german Papiermark, (observe the pictured 5 trillion bank note in this link) as a classic example of this phenomenon... Read More

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