Money - it is not what you think

[TabJockey]

There certainly are allot of these anti fiat posts popping up all over the internet. Fiat system is essential to a modern financial system, does anyone actually believe deep down that living standards would be higher with a non fiat system?

It would be constrained.

 

[Smurf1976]

Well if you stack that money some where it doesn't do you any good but if you invest that money in a business more often than not it return far greater amount
Then with that u can buy your gold your cars your house what ever you fancy

You could invest in a business regardless of the monetary system being used.

 

[Vicki]

There certainly are allot of these anti fiat posts popping up all over the internet. Fiat system is essential to a modern financial system, does anyone actually believe deep down that living standards would be higher with a non fiat system?

It would be constrained.

I could be wrong, but North America could be evidence enough, that such a system can go a little 'pear shaped'.

Again, in my simplistic point of veiw, such a system could be easily abused, If prudent management isn't seen to...Except only perhaps, artificial short term fixes..

Vicki

 

[Smurf1976]

There certainly are allot of these anti fiat posts popping up all over the internet. Fiat system is essential to a modern financial system, does anyone actually believe deep down that living standards would be higher with a non fiat system?

It would be constrained.

The "modern financial system" is where the problem lies. It has been very good at fuelling consumption and leaving the bill for tomorrow. It, combined with other things directly associated with it, has also been very good at harming actual production of goods in developed economies.

It would indeed be constrained. We would have to live within our means, rather than building up a mountain of IOU's for the next generation to worry about.

The USA is the ultimate case in point. Yesterday's major world power in every way, today's increasingly fragile society at the mercy of others. In 1970 before all this started, the US called the shots on just about everything. In 2010, the US lives in hope that the "developing" world doesn't call in the debt collectors.

Fiat may not be the "cause", just like oil on the road does not "cause" a traffic accident. But it has been a very key aid in the whole process.

If you put money in a generic US stock market investment a decade ago then, after inflation, you've gone backwards. Those who invested in gold or just about any other tangible asset back then will be smiling however.

 

[tothemax6]

There certainly are allot of these anti fiat posts popping up all over the internet. Fiat system is essential to a modern financial system, does anyone actually believe deep down that living standards would be higher with a non fiat system?
It would be constrained.

Actually the opponents of fiat money believe in a gold standard precisely because it would be 'constrained', and this aids living standards. The reason being, is that governments face an automatic restriction on how much money they can print (finite gold reserves) or borrow (since interest rates are set by the market). So in the situation in which countries have crap governments, yes it means a better quality of life.

 

[Tysonboss1]

On a more serious note, you would have to invest your money in something that appreciates quicker than our dollar deflates in buying power!

owning real assets is the best hedge against inflation.

Inflation only devalues cash,

for example if you held you 20c piece in your money box as you noticed it lost value over time.

However if you held the ice cream itself in the freezer then it would rise in value along with inflation, Same can be said for the factory that makes the ice cream, and the property the shop sits on.