Why do people trust fiat money?

[murraypaul]

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.

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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

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.

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. 

[johnyj]

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]

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

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

[crumbs]

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?

(Just to make sure -- the ruling elite don't get how money works, but u & the lunatic fringe do, right? )

[crumbs]

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

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.

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.

[johnyj]

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

[murraypaul]

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.

[crumbs]

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?