Fiat Currency Always Fails

[ashame]

Yes, fiat money does not the applicable use in making transaction by buying, selling, paying and investment. I consider it as a running to its forgotten place to let crypto currencies rule the economy.

Agreed, Fiat money has been used in crimes and other evil doings, well most of the currency does, But fiat fails more, It cant be used in many transactions like, digital or economical advancement.

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[redsap]

Yeah fiat currency are tradeable by using in reality. Need some aplication for any online trade and making so much fee in it to doing transaction

[SinisterS]

You could say that all types of currency eventually fails. Crypto is a new type of currency, but it might end up failing one day. We don't know. Many do. Sure they are shit coins, but they were a currency.

[The Sceptical Chymist]

I've been hearing variations of this statement for years now, so much so that my mind just tunes it out when I see the words.  "Fiat always goes to zero" is part of the propaganda that precious metals dealers and others use to play upon people's fears so they can sell them gold & silver. 

The US dollar might eventually die.  It probably won't in any of our lifetimes, though.  I think bitcoin has a better chance of becoming obsolete and dying than any of the world's stable fiat currencies.  Be very careful what you listen to when you read this shit on the internet.  Always take into account what people's motivations might be for telling you why you need to own gold & silver--they're probably trying to sell it to you.

[Herbys]

I've been hearing variations of this statement for years now, so much so that my mind just tunes it out when I see the words.  "Fiat always goes to zero" is part of the propaganda that precious metals dealers and others use to play upon people's fears so they can sell them gold & silver. 

The US dollar might eventually die.  It probably won't in any of our lifetimes, though.  I think bitcoin has a better chance of becoming obsolete and dying than any of the world's stable fiat currencies.  Be very careful what you listen to when you read this shit on the internet.  Always take into account what people's motivations might be for telling you why you need to own gold & silver--they're probably trying to sell it to you.

Of course, the crypto-currency market, this is the most risky market, at any moment the whole market can get under a ban.
I believe that in order to profit from capital, you can invest in gold or deposit in a bank.
Money should not be in a static state.

[BobK71]

You can't store value permanently. It's physically impossible. Things that have value decay and are consumed, and value is constantly destroyed through these two means. The failure of goldbugs is that they expect that all value ever created will last forever, which is why they push the gold standard so hard. It defies economy reality. The value of what you create in the present is going to be worth significantly less in 50 years, and the money that underlies that value should likewise be worth less. Value starts to decay the moment it is created. When money doesn't also, it creates deflation. The appreciation of value in money creates disincentives to spend, which lowers economy activity and puts downward pressure on the economy. Consumption is what creates value, and inflation stokes consumption. It may look manipulative, and perhaps it is, but it's far preferable to the the types of crises caused by the gold standard and our collective inability to shorten the duration and severity of those crises. If all value ever created was storable infinitely, the gold standard would make sense. Because value can't be stored indefinitely, gold ultimately does more harm than good.

I think, like most people, you totally misunderstand the gold standard.  GS (as opposed to using physical gold/silver as money) was fundamentally no different from today's 'fiat' money, in the sense that the elites issue money and debt out of thin air and prop them up with state power.  The only difference was that the elites owned enough gold to be able to use it to help prop up their issued paper money.

No wonder, the GS period was full of crises too.  That the GS elites tightened money and worsened the misery after a financial crisis is often blamed on gold by mainstream economists today.  The truth is that this tightening action (and its motivation) was not different in nature from today's.  E.g. the IMF forced SE Asian countries to tighten after the 1997 crisis, and at the other extreme even the US post-2008 didn't inflate the money supply enough to totally undo the pain from the bust.

The difference in the degree of post-crisis loosening, both among different countries and between the GS period and today, is due to how much the elites can/could get away with politically, not to gold.  (Even though the nature of a gold-based system might have provided more of an incentive for the elites to tighten, there is no essential difference between the different money systems.  The goal is always to benefit the elites, at the cost of pain for everyone else, when necessary.)  As Barry Eichengreen admits, the growth of Western democracy and labor unions in early 20th century, with the resulting drop in popular tolerance for pain, made the gold standard pretty much untenable.

Money as a store of value is a major benefit of a post-bartering economy.  If you want to argue that this benefit is physically impossible, you have to ignore the fact that even though physical resources decay as soon as they're made, the savings in a society incentivize future production of the resources.  And this is nothing more than natural market incentives.  Simple market incentives also dictate that the older one gets and the more savings one has accumulated, the more one wants to spend.  This also seems to be ignored by those who argue that central bank money printing is the only ultimate support for demand.

The real question is not whether we want to stimulate consumption and avoid deflation.  Of course we do.  The real question is whether that process should be driven by market forces or central planning.  Over the last five centuries, central planning in the money sphere has proved itself fundamentally no better or different, though more invisible, than the central planning of a socialist society.  We always have financial crises.  Safe assets are always depreciating.  And we always use wars, assassinations, and coups to support our money system internationally.

The only reason we have the current money system is to benefit the elites.

[Epimetheus]

In my opinion As long as fiat money still serves as a medium of exchange, it will always be needed by the people of today and therefore it will always have a function as an asset to all of us. although the best value-keeping asset is gold but even though gold is quite liquid, it is no longer money that serves as an intermediary.

Bitcoin and fiat currency made a balance in our society. Bitcoin is a digital currency which guide us towards a advance society. Sometimes fiat currency disappoint us like, Fiat currency is a physical form of currency so many time its duplicate are made by criminal minded which affect our society and our country economy too. Using of fiat currency is not always safe and easy to use. Like i said fiat is not fall always. It is a usefull asset in where no Internet or electricity connection present. 

[yslyv]

See:

There Is No Escaping History.  Fiat Currency Eventually Fails.

Notice that this is a critique of fiat money -- not a critique of state-issued money under a gold/silver or other standard.  Fiat money is a rare occurrence in modern history.  (We live in strange times!)  As we can see, the examples found by the author are a small number of short periods here and there.

I have my own critique of gold/silver standards, but that's another issue.

yes indeed. that is why all banks aim to pay interest when you put money to your bank account. it promises to protect the value of your fiat currency. (but ofcourse the rates are never enough because of traditional banking system)

[Harrow30]

See:

There Is No Escaping History.  Fiat Currency Eventually Fails.

Notice that this is a critique of fiat money -- not a critique of state-issued money under a gold/silver or other standard.  Fiat money is a rare occurrence in modern history.  (We live in strange times!)  As we can see, the examples found by the author are a small number of short periods here and there.

I have my own critique of gold/silver standards, but that's another issue.

This and other facts have been stated to prove that fiats will be impeded as technology takes over the future.  Most cryptocurrency experts have said that bitcoin price will increase again. And same for the alcoins too. Bitcoin is the digital gold and will always be on top of the rest.j

[jaysabi]

You can't store value permanently. It's physically impossible. Things that have value decay and are consumed, and value is constantly destroyed through these two means. The failure of goldbugs is that they expect that all value ever created will last forever, which is why they push the gold standard so hard. It defies economy reality. The value of what you create in the present is going to be worth significantly less in 50 years, and the money that underlies that value should likewise be worth less. Value starts to decay the moment it is created. When money doesn't also, it creates deflation. The appreciation of value in money creates disincentives to spend, which lowers economy activity and puts downward pressure on the economy. Consumption is what creates value, and inflation stokes consumption. It may look manipulative, and perhaps it is, but it's far preferable to the the types of crises caused by the gold standard and our collective inability to shorten the duration and severity of those crises. If all value ever created was storable infinitely, the gold standard would make sense. Because value can't be stored indefinitely, gold ultimately does more harm than good.

I think, like most people, you totally misunderstand the gold standard.  GS (as opposed to using physical gold/silver as money) was fundamentally no different from today's 'fiat' money, in the sense that the elites issue money and debt out of thin air and prop them up with state power.  The only difference was that the elites owned enough gold to be able to use it to help prop up their issued paper money.

This paragraph contradicts itself. If the GS was fundamentally no different than today's fiat money, there would be no reason that the "elites" would need to own enough gold to back up the paper money since the paper money was created out of thin air and propped up with state power and had absolutely no tie to gold. It is because it was fundamentally different in function that the change was necessary. The GS backed paper money by allowing people to exchange it for gold the equivalent in gold. That is fundamentally different than the fiat money system we currently have.

[realcrypto]

It is time the economists  across the globe know that fiat currency cannot rescue the world from economic melt down. Cryptocurrency and blockchain is the solution. Cryptocurrency gives people opportunity to carryout Business transactions without constraints

[BobK71]

I think, like most people, you totally misunderstand the gold standard.  GS (as opposed to using physical gold/silver as money) was fundamentally no different from today's 'fiat' money, in the sense that the elites issue money and debt out of thin air and prop them up with state power.  The only difference was that the elites owned enough gold to be able to use it to help prop up their issued paper money.

This paragraph contradicts itself. If the GS was fundamentally no different than today's fiat money, there would be no reason that the "elites" would need to own enough gold to back up the paper money since the paper money was created out of thin air and propped up with state power and had absolutely no tie to gold. It is because it was fundamentally different in function that the change was necessary. The GS backed paper money by allowing people to exchange it for gold the equivalent in gold. That is fundamentally different than the fiat money system we currently have.

The GS was fundamentally no different from today's 'fiat' money in the sense that the elites prop(ped) up their system with state power, while issuing paper money whose volume had really nothing to do with real economic needs but everything to do with the elites' needs to benefit themselves.

The difference that you mention is only in the precise mechanism with which they prop up their system.  When they had enough gold, they could afford to allow anyone (at least in 'top' countries like the UK and US) to redeem paper money for gold at the fixed rate.  This prevented any appreciation of gold in state money terms.  But gold famously earned no interest, so, as long as their bubble lasted, the average saver was incentivized to put their money in interest-bearing debt based on paper money.

When they don't have enough gold, they have to resort to clandestine suppression of gold prices via derivatives (see serious books such as 'The Gold Wars' or 'The Gold Cartel' for evidence) to make it appear that gold is losing value all the time, except for brief periods when they have to allow gold to go up.  This is why I always put 'fiat' in quotes.  We never left the gold standard in any real sense (if you define GS, properly, as simply an elite-sponsored system for suppressing gold prices in state money terms.)  We never left because the elites have never been able to.

[hhussain]

The fiat currency has never failed Howard it just an evolution from the phase of the global economy know when you look at the phase of the fair it is just an evolution from the barter trade system and this is just a symbolism of the fact that democratic form of currency always prevails in this system

[Himanshu111]

I think, like most people, you totally misunderstand the gold standard.  GS (as opposed to using physical gold/silver as money) was fundamentally no different from today's 'fiat' money, in the sense that the elites issue money and debt out of thin air and prop them up with state power.  The only difference was that the elites owned enough gold to be able to use it to help prop up their issued paper money.

This paragraph contradicts itself. If the GS was fundamentally no different than today's fiat money, there would be no reason that the "elites" would need to own enough gold to back up the paper money since the paper money was created out of thin air and propped up with state power and had absolutely no tie to gold. It is because it was fundamentally different in function that the change was necessary. The GS backed paper money by allowing people to exchange it for gold the equivalent in gold. That is fundamentally different than the fiat money system we currently have.

The GS was fundamentally no different from today's 'fiat' money in the sense that the elites prop(ped) up their system with state power, while issuing paper money whose volume had really nothing to do with real economic needs but everything to do with the elites' needs to benefit themselves.

The difference that you mention is only in the precise mechanism with which they prop up their system.  When they had enough gold, they could afford to allow anyone (at least in 'top' countries like the UK and US) to redeem paper money for gold at the fixed rate.  This prevented any appreciation of gold in state money terms.  But gold famously earned no interest, so, as long as their bubble lasted, the average saver was incentivized to put their money in interest-bearing debt based on paper money.

When they don't have enough gold, they have to resort to clandestine suppression of gold prices via derivatives (see serious books such as 'The Gold Wars' or 'The Gold Cartel' for evidence) to make it appear that gold is losing value all the time, except for brief periods when they have to allow gold to go up.  This is why I always put 'fiat' in quotes.  We never left the gold standard in any real sense (if you define GS, properly, as simply an elite-sponsored system for suppressing gold prices in state money terms.)  We never left because the elites have never been able to.

No fiat currency cannot fail at all.Fiat currency is used by whole of the world and it cannot be overtaken by any other form of currency.Fiat currency is functional since the traditional time period and every person on the Earth uses it.Fiat currency is accepted internationally and all the transactions are done through the fiat currency only.Fiat currency is centralised so it is backed by the central banks and governments too.People trust fiat currency only.

[mak2017]

No fiat currency cannot fail at all.Fiat currency is used by whole of the world and it cannot be overtaken by any other form of currency.Fiat currency is functional since the traditional time period and every person on the Earth uses it.Fiat currency is accepted internationally and all the transactions are done through the fiat currency only.Fiat currency is centralised so it is backed by the central banks and governments too.People trust fiat currency only.

3rd parties are printing the money for most of the governments worldwide now, thats why people like you and me every year loose money due to so called "inflation"
Which is actually due to government ordered 100 billions and have to pay back 105 billions, there are no 5 billions on the market, so it will be taken from us.
Our current money - dollar, euro etc. are simply just paper, and nothing more! Only because people are being paid for their work with fiat, can buy things with fiat - it has value.
But nobody, really nobody can tell you how much dollars or euro are out there, because the banks even don't know.
So once again our current money will be replaced soon enough, with something better and what haves real value.
Fiat currencies will fail and fail hard at the end, unless 3rd parties will be printing more and more money, making countries go deeper and deeper in debt - that's what actually happening when they take another 100 billions.
I wouldn't be that sure about all people trust fiat only, as i know very wealthy persons who already transferred a large part from their money into bitcoin and ethereum for example few years ago, and i'm pretty sure they don't regret it.

[netil]

Fiat and the gold standard are financial practices that are hopelessly outdated. They are very hard to give up because they have been the basis of the world economy for many years, but the world is changing and the financial sector will have to change with it.

[loveinberlin]

I don't know for sure but to my mind this takes place due to the fact that it doesn't have a reliable strategy. I m sure that it is possible to trade only btc and ether , as for other currency i m not sure it is worth efforts

[aolin118]

I agree, the fiat money is a short term popularity, it will be replaced by another kind of currency in a long term. However, in the near future, it will be prosperous and attract many investor.

[Hoping]

See:

There Is No Escaping History.  Fiat Currency Eventually Fails.

Notice that this is a critique of fiat money -- not a critique of state-issued money under a gold/silver or other standard.  Fiat money is a rare occurrence in modern history.  (We live in strange times!)  As we can see, the examples found by the author are a small number of short periods here and there.

I have my own critique of gold/silver standards, but that's another issue.

Because fiat currencies are very uncertain. They (not all) depends on US dollar. And when the USD fails, all of them will be affected. Thanks for that interesting link. Cryptocurrencies is the next generation money of this era.

[Sengoko]

See:

There Is No Escaping History.  Fiat Currency Eventually Fails.

Notice that this is a critique of fiat money -- not a critique of state-issued money under a gold/silver or other standard.  Fiat money is a rare occurrence in modern history.  (We live in strange times!)  As we can see, the examples found by the author are a small number of short periods here and there.

I have my own critique of gold/silver standards, but that's another issue.

Some of you guys in this forum are full-time dumbos. So you think that when dollar falls that means that it is over for the whole world and that Bitcoin and other crypto currencies will come and take over 😂? Sounds like something only a dumb person would say. How can you be thinking that? Whenever dollar falls, the value of Yen and Euro will appreciate. Bitcoin is not a real currency, it’s just like something else made to be on its own and when you’re using it you’re in complete control of your money and not the government being in control.