What makes a Fiat worthless?

[vintages]

From the three points you mentioned, I don't think corruption has any thing to do with it. However, economic status of a country can also make a country currency worthless too.
Also, another vital cause I feel that can influence a currency to been worthless is how high or low other country depend on it and also how much commodity can that fiat be spent on. A good example is the USD dollar.

[syamster]

From the three points you mentioned, I don't think corruption has any thing to do with it. However, economic status of a country can also make a country currency worthless too.
Also, another vital cause I feel that can influence a currency to been worthless is how high or low other country depend on it and also how much commodity can that fiat be spent on. A good example is the USD dollar.

these two factors play a great role in the inflation of a country's currency, but the most important thing in the inflation is corruption, as the corrupt leaders are not sincere with their countries and they always seek their own interest in any scenario, these leaders always try to hoard money from the country's money which affect the economy badly, so the developmental process in the country stops because of the weak economy which directly causes the inflation in fiat.

[jrrsparkles]

From the three points you mentioned, I don't think corruption has any thing to do with it. However, economic status of a country can also make a country currency worthless too.
Also, another vital cause I feel that can influence a currency to been worthless is how high or low other country depend on it and also how much commodity can that fiat be spent on. A good example is the USD dollar.

People can't show their money which was earned through something illegal,so they are not going to pay taxes for it,we know tax is the main thing for an stronger economy which later leads to the losing of purchasing power as you stated.

[yulchatar]

From the three points you mentioned, I don't think corruption has any thing to do with it. However, economic status of a country can also make a country currency worthless too.
Also, another vital cause I feel that can influence a currency to been worthless is how high or low other country depend on it and also how much commodity can that fiat be spent on. A good example is the USD dollar.

these two factors play a great role in the inflation of a country's currency, but the most important thing in the inflation is corruption, as the corrupt leaders are not sincere with their countries and they always seek their own interest in any scenario, these leaders always try to hoard money from the country's money which affect the economy badly, so the developmental process in the country stops because of the weak economy which directly causes the inflation in fiat.

Well, in general, you are a little mixed up. Inflation is an increase in the price level of goods and services for a long time, and a sharp decrease in its value is called devaluation. And it can also be influenced by such factors as the excess of imports over exports, the panic of the population (when foreign currency is massively bought up and thereby the national currency collapse is provoked); trade relations between countries (geopolitics) and other factors. Some have already been mentioned.

[Apened]

We have come across so many national currency becoming worthless and recently we have heard the news of barter system in Zimbabwe due to the fall in the value of national currency but what really makes the Fiat worthless? Is it corruption or war or national economical crisis? Or the National GDP which makes it fall?

It would be natural for me to have a economic crisis as we know that the money we use to spend Fiat is only a legal tender, because there's no real actual price of any paper or coin we are holding if the government will not issue a value on it. Economic crisis and the GDP is relatively related to each other. I think we can't ignore the fact that cryptocurrency is one of the reasons right now. Time will tell.

[gunungkembar]

conditions that make us worthless I feel the influence of inflation from fiat money, printing money with a very large amount can make fiat become worthless like that.

[doomistake]

conditions that make us worthless I feel the influence of inflation from fiat money, printing money with a very large amount can make fiat become worthless like that.

Due to monetary policy that the Government have, they are freely to print and devalue fiat easily, even though we want to takeover and take care of this thing, we can't messed up with the Government in this kind of matter cause you know guys what will happen, we could end up in bars. Inflation is a disaster of fiat currency since the very first time, when things got their value and people started to trades commercial products.

Technically, fiat is not that useless, it is that the Government makes it looks and really useless because of their power creating more of it, Governments are worthless, in my jurisdiction.

[clickerz]

conditions that make us worthless I feel the influence of inflation from fiat money, printing money with a very large amount can make fiat become worthless like that.

Due to monetary policy that the Government have, they are freely to print and devalue fiat easily, even though we want to takeover and take care of this thing, we can't messed up with the Government in this kind of matter cause you know guys what will happen, we could end up in bars. Inflation is a disaster of fiat currency since the very first time, when things got their value and people started to trades commercial products.

Technically, fiat is not that useless, it is that the Government makes it looks and really useless because of their power creating more of it, Governments are worthless, in my jurisdiction.

Only the issuer makes it worthless or no value at all. They can demonetized it, or announced that a certain denominations will no longer be allowed as tender payments etc. Yeah, its the government that really makes it useless , they have the power to create and  destroy it.    Inflation weakens it, lower its value or purchasing power.

[Ludmilla_rose1995]

in my opinion, what causes fiat is no longer valuable because of the great inflation in a country. This can happen when the government implements a budget deficit system, where the budget deficit is overcome by printing new money. But this makes the amount of money circulating in the community increase and cause inflation.

[BChydro]

Therefore, it cannot be said that fiat is already outdated, it should be changed to other financial systems.

If your governing body comes up with good projects that could boost the economy rather than increase the inflation rate and have the right policies to balance the inflation then there is nothing to worry, i am not expecting any major changes in any financial systems and we are not going back to the gold standard we had in the past but as long as there are no stupid economic policies the fiat system will be fine.

[marcbitcoins]

We have come across so many national currency becoming worthless and recently we have heard the news of barter system in Zimbabwe due to the fall in the value of national currency but what really makes the Fiat worthless? Is it corruption or war or national economical crisis? Or the National GDP which makes it fall?

For me it will be the corruption has the greater contribution to make a certain economy to become unstable making for their money value to become worthless too. Money will not be able to circulate if it will just keep it by a certain individuals causing damage to nation's growth and development. Corruption will also leads to allocative inefficiency / diverting public resources for private gain which contributes to persistent income & wealth inequality and reduced progress in cutting rates of extreme poverty.

[Pamadar]

From the three points you mentioned, I don't think corruption has any thing to do with it. However, economic status of a country can also make a country currency worthless too.
Also, another vital cause I feel that can influence a currency to been worthless is how high or low other country depend on it and also how much commodity can that fiat be spent on. A good example is the USD dollar.

People can't show their money which was earned through something illegal,so they are not going to pay taxes for it,we know tax is the main thing for an stronger economy which later leads to the losing of purchasing power as you stated.

Tax is the  blood of the economy of each country. With such illegal transactions in which government can not getting anything from, it will lessen the power of a country that can also lead to its fiat devaluations. Fiat become worthless once the economy gets weak. We can't deny the fact that
the value of any fiat relies with how the economy of a country is performing, the more it's been competitive, the higher the value of fiat will
grow.

[abhiseshakana]

Due to monetary policy that the Government have, they are freely to print and devalue fiat easily, even though we want to takeover and take care of this thing, we can't messed up with the Government in this kind of matter cause you know guys what will happen, we could end up in bars. Inflation is a disaster of fiat currency since the very first time, when things got their value and people started to trades commercial products.

Technically, fiat is not that useless, it is that the Government makes it looks and really useless because of their power creating more of it, Governments are worthless, in my jurisdiction.

You cannot say that the government is worthless. Why do I say it that way because there is the main principle of the function of government that is maintaining public order and security so that every member of society can feel happiness. In maintaining order, the choices made are the best choices from bad choices. In the current era of globalization, domestic stability is also influenced by other countries' external policies.

The problem of the fall in fiat value is not only caused by the government's policy to print new money and not all governments adopt a policy of printing new money to overcome the economic problems in their country. Printing as much money as possible is allowed as long as the printing of money is backed up by gold, so the problem is there is no backup (creating out without nothing). Every fiat money printed by the central bank will become a burden (debt) to the economy.

In addition, why FIAT money becomes worthless because, since the collapse of the Breton Woods system, the world's monetary system automatically relies on the US dollar, as a consequence many countries in the world keep their foreign exchange reserves in dollars. International transactions such as import-export, oil trade, and financial services use the US Dollar as a transaction tool. So, indirectly there is a high enough relation of all these countries to the stability of the dollar. So the instability of the dollar will cause inflation to export throughout the world and the burden on the American economy will be felt by the entire world community.

[riso2015]

conditions that make us worthless I feel the influence of inflation from fiat money, printing money with a very large amount can make fiat become worthless like that.

Correct, inflation is the most serious problem in state finances, if inflation occurs then the currency
will be worthless because every time we want to buy something then our money becomes less, not enough.

[hatshepsut93]

There are a few reasons why fiat currencies die. One is hyperinflation, which is caused by government printing money to deal with some problems like war, natural disaster, economic crisis and so on. Obviously it only makes things worse. The other reason is when the currency's country ceases to exist. When the Soviet Union collapsed, it's currency became worthless rather quickly. Also, sometimes countries abandon their currencies and start new ones, this often happens as the result of hyperinflation. Many EU countries have discontinued their national currencies in favor of Euro.

[STT]

The old Rouble was exchangeable to the new Rouble at a rate of 10,000 to one.    So quite close to worthless and it was because debts exceeded assets, of course the country is rich in many ways (given time to harvest) but it did not have means to pay its on demand debt at that time.      That is what tends to happen, the scales tip a country towards just slamming the reset button.   Its easier for them to destroy the debt and acquire a bad reputation then the 50 years it might take to repay the majority of the debt, doing this can lead to great upsets even wars and the population is stranded by an inability to trade beyond a local barter quite often.

In theory inflation is a form of soft default, like a country raising the retirement age after the population spent 40 years working towards that retirement.    The current global economy is very close to this soft default situation I think, which is why many speculate more secure transactions with less self bias and BTC qualifies in some way for this.

[secretgirl]

in my opinion a country's currency is worthless because that country prints too much money. and if a country prints too much money will cause people to have a lot of money and cause their purchasing power to be high and make the price of goods go up this makes the value of their currency worthless. as happened in zimbahwe. and inflation can also be caused by weak economic conditions and many cases of corruption.

[error08]

IMHO, Hyper inflation.

That's the cause of why fiat money becomes worthless in some countries like Venezuela. And those what you have mentioned triggers the economic status of that country which results to HI. A war will totally wipe out a lot of resources on that involved area and printing of more cash will also contribute to it.

That's not the cause, but what causes hyperinflation in the first place? one of the reasons for Venezuela's hyperinflation due to trade restrictions by the U.S. and other countries follow U.S. politics. The sanctions restrict the Venezuelan government's access to U.S. debt and equity markets because of the government responsible for violations of human rights, corruption, degradation in the rule of law and repression of democracy. But the main reason for Venezuela's hyperinflation because of the GDP growth depends on petroleum exports has been in a state of total economic collapse, massive money-printing, and deficit spending.

In this case, fiat becomes worthless if the government can't maintain its value related to the country's GDP and GNP growth.
Many factors affect the GDP and GNP of a country, such as;
The quality of human resources (skills, creative, abilities, training, and education), natural resources, capital formation, technological development, social and political factors.


source

[horrifiedx1]

fiat usually becomes worthless because of problems in the country, as is the case with venezuela, because of high corruption rates, it has an impact on the country's economy that is destroyed, so that people become victims. for Zimbabwe I don't think it's that much different either

[Sithara007]

As long as fiat has some purchasing power, it will not become worthless. And people don't have much options available with them. The only alternative to fiat cash is barter. And for sure not many would prefer barter over fiat currency. And that is the advantage with fiat. People are forced to use them, as they don't have any other choice readily available.

Ideally, a currency should have stable purchasing power. But that is not true in the case of fiat. It's purchasing power goes down every day, due to inflation. And this inflation results from the fact that the central banks are printing more and more banknotes every year, to neutralize the budget deficit and to manage the federal debt. Obviously Bitcoin represents the solution for this, but the governments will never allow it to be used for this purpose.