Collapse of fiat money

Discussion in 'Economy' started by ukusa, Dec 1, 2011.

  1. ukusa
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    ukusa Rookie

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    Hi all.

    I'm reading some increasingly alarmist articles suggesting that we face the possible collapse of fiat money, along with all the apocalyptic scenarios that this implies. Frankly, much of the economic theory is way over my head, and I'm having difficulty separating reputable writers from simple doom-sayers.

    So could you educate me please? Is the collapse of fiat money a remotely possible scenario, or is it just fringe lunatics promoting this idea?

    Thanks!
     
  2. Mr. H.
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    Mr. H. Diamond Member

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    You've come to the right place.
    Nothing but reputable writers around here.
    Yessiree bob.
     
  3. ukusa
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    ukusa Rookie

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    Well I'm struggling to find anywhere better to get the question answered :tongue:
     
  4. expat_panama
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    expat_panama Silver Member

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    Help me out on what your question is and tell me what you mean by 'fiat money'. Can you give me an example of any currency or other form of money in general use that wasn't first established by some form of government? I mean, like all money is 'fiat money' isn't it?
     
  5. ukusa
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    ukusa Rookie

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    I guess gold would be the obvious answer.

    The alarmists (or realists, depending on your take) often site Weimer Germany as a case study for what to expect - but on a much larger scale. Hyperinflation and paper currency becoming effectively worthless.

    Like I said, I have no background in economics, which makes it difficult to evaluate whether such predictions are realistic or just the lunatic fringe (or people with a vested interest in selling gold!). There are some pretty scary predictions floating around at the moment, and I'd like to know whether they should be taken seriously.
     
  6. expat_panama
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    expat_panama Silver Member

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    We're not communicating.

    Please tell me when, OK gold --has been named as money for general use by anything other than some form of government. What we've got here is the fact that whenever gold is money it's because of government fiat. A year or so ago some clown in North Carolina iirc decided that gold was money instead of dollars. He got put in jail. During the Washington administration Americans were ordered to use pound notes from the UK for money. All money is fiat money.
     
  7. editec
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    editec Mr. Forgot-it-All

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    Of course anything is POSSIBLE, but certainly there isn't much chance of hyperinflation right now.

    The fringe lunatics are most GOLD BUGS or the folks who buy and sell gold.

    Of course you can probably understand why it is in their best interests to tell people that hyperinflation is around the corner.

    Because FEAR drives sales of gold.

    Note that THEY are selling gold?

    What does THAT tell you about how much THEY believe their own hyperinflationary hype?

    Do you really think they're be selling GOLD if they really thought hyperinflation was about to happen?

    Gold is wildly overpriced, in my opinion.

    Oh yeah, one more thing...

    Using Gold as the specie does NOT prevent inflation.

    Read some economic history, amigo.

    The period post WWI through WWII will tell you a LOT that the gold bugs do not want YOU to know.
     
    Last edited: Dec 1, 2011
  8. Ernie S.
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    Ernie S. Platinum Member

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    Fiat money is essentially worthless without the backing of a stable economy.
    Gold and silver are relatively stable.
    Consider, when I was a kid, an ounce of silver was worth $1. It bought 10 loaves of bread. Today, that same ounce sells for $33.24 and still buys 10 loaves of bread.
    The FED decided yesterday to print up a bunch of dollars to try to pump up the Euro. The price of gold, silver and the Dow, all went up, not because of consumer confidence, but because a cheapened dollar buys less gold.
     
  9. Sundial
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    Sundial Class Warrior

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    It's not remotely possible, and the people promoting the idea are fringe lunatics and snake-oil salesmen.

    So long as peole need dollars to pay taxes and to repay loans, there will be a demand for dollars.

    Fiat money is used by every first-world country, and the rise of fiat money has coincided with the greatest expansion of wealth the world has ever known. Gold - on the other hand - has failed everywhere it's been tried. Gold is inconsistent with rapidly increasing wealth.
     
  10. Truthmatters
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    Truthmatters BANNED

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    Gold prices can and have been manipulted in the past.

    Anyone who wants us back on the gold standard dont know history
     

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