I can tell you about a few fiat currencies that are not forced on people and that are commonly used.
The USD is one of them, the EUR another. In many countries across the world, it may even be illegal to use them, but they are used nonetheless.
Or how about a privately issued fiat currency that's accepted and traded worldwide? Think Bonus Miles.
You seem to be using the term 'fiat' to mean 'unbacked.'
The rest of us are using the term 'fiat' to mean the official definition: "a formal authorization or proposition; a decree". Money forced on you by people with the power to compel you.
I've never seen your particular use of the word "fiat", but that may be a language issue.
Fiat money has been defined variously as:
- any money declared by a government to be legal tender.
- state-issued money which is neither convertible by law to any other thing, nor fixed in value in terms of any objective standard.
- money without intrinsic value.
I tend to use the term "fiat" by the first two definitions, the third being a little too general for my taste.
Also, we seem to have a very different view of states/authorities. I don't see "people with the power to compel you" but rather a society with self-chosen rules.
I repeat: no one forces you to hold any currency, as far as I know.
That you're required to use it for a short period of time when it comes to settle your bills, is an inconvenience, no more, no less.
When the coercion to use the money is that pervasive (and invasive,) people will also hold onto stashes of it. That's just human nature. And the people who make use of this scam know it.
If it's so attractive for them to hold it, I fail to see where they are
forced. There's a huge difference between making a good offer that you willingly accept and forcing you to accept my offer.
Your whole argument is centered on the fact that "the government" forces you to hold their money. Which is clearly not the case. They force you to use it for certain acts like paying taxes etc., but it's perfectly legal for you to keep your live savings in whatever currency or commodity you prefer. It is highly convenient for you to keep at least a large share of your day-to-day savings in the greenback, which is why you actually hold on to your Dollars. But that's not being enforced by anybody. That the Dollar depreciates in value over time is a fact and probably even stated explicitly (actually, i'm unsure about the Dollar, but the Euro has a target inflation rate of 2%, which is no secret, but publicly announced). The choice is yours. No force involved.
It could be considered coercion, when you're forced to use it.
It could be considered fraud, if someone actually made a promise about its value and devalues it later on (but in reality, no one makes such a promise).
The coercion makes it theft.
Wrong again. If anything, taking value from you by force is
robbery. This may seem like nitpicking on my side, but i think it is important to use the correct legalese when you accuse someone of something.
If Bob approaches Alice and *forces* her to accept his IOUs in exchange for her goods and services, and to use them in her dealings with others, then produces and distributes so many more IOUs that the ones Alice has are only worth a tiny fraction of their original value, you can argue all you want about how it's not theft but when he's locked up like a common thug for it, most of society will have little sympathy for him.
First of all, you're over exaggerating a lot here. Dollar inflation has been around 2-3% over the last decade, with spikes into the 5.x range and also short tendencies of deflation. That's a little worse than the situation of the Euro, but still a pretty stable currency for any practical use. Calling this "worth a tiny fraction of their original value" is like accusing someone of mayhem because he pinched you in the cheek.
Fiat is a really good concept. I've used fiat all my life and it served me quite well.
Fiat, as defined by the second usage above, is NOT a good concept. You say it has served you and everyone you know quite well. I'd argue it has served you all abysmally.
Sure, you could make use of it. It was *functional*.
It had to at least be that for the scam to work. But it also resulted in the loss of quite a significant portion of your wealth through inflation over just the last few decades. Worse, it didn't just cause that wealth to evaporate, it enabled the theft of that wealth by insiders who quite literally profited at your expense. I can only imagine you feel fiat has served you well because you've never had the real option of living in a (well-off) society that didn't revolve around it. And of course, those profiting from it would like to keep it that way.
I've been aware of the target inflation rate of 2% for at least the last 20 years of my life, which is even a little longer than the period of time where i had any significant income myself. The overall economic progress of the society i live in has given me access to a good school system, affordable, quality health care, decent housing, parenting needs for my sisters (i don't have kids of my own), a solid retirement plan for my parents, etc. I cannot deny, though, that over the last few decades things got a little worse where i live compared to the welfare state of the 70ies. Also, my own retirement plan looks grim, compared to what my parents could expect. But all in all, I cannot complain.
One of the key elements for the success of the economic system that made all this possible was a slightly inflationary currency which made hoarding a little less attractive than spending. That's just the kind of lubricant that keeps an economy's motor going.
If you think of profit in the very narrow sense of gathering more value, you might just keep to your theory of "inflation is theft". If you value your own quality of life over monetary accumulation, though, maybe you could get over it and think of that broader picture.
Acknowledging the ills of fiat is hardly FUD. There's a reason 2008 happened and that the global economy is still on shaky ground.
2008 did not happen because of fiat. Actually, fiat was not even damaged as badly by the outcome of the ongoing financial crisis as were other instruments of our economy. It got bruised, though, that's for sure.
Avoiding all that nonsense is kinda the entire point of Bitcoin.
I beg to differ. I'm (compared to the majority of the bitcointalk crowd) a longtime user and also holder of a tiny handful of bitcoins. I've never regarded bitcoin as a way of avoiding fiat. It can be complimentary currency, it's got benefits of its own, its elegant and useful in its own right, but the strength of bitcoin is not as a
replacement of fiat money, but rather side by side with each other.
