Third, once a fiat money
regime has been put into place, the ensuing collective corruption--that is, the development among the people of an increased personal interest in invasive action--makes it increasingly difficult, if not impossible, to seek monetary reform in the sense of re-establishing free market money.
570) explained, financing Treasury borrowing directly from the central bank is no different from a government simply creating fiat money
to finance its spending:
Following its successful use of fiat money
in 1690, Massachusetts made multiple issues of paper currency to finance its involvement in Queen Anne's War (1702-1713).
Free-market money within a trusted network of private contracts differs fundamentally from an inconvertible fiat money
supplied by a discretionary central bank that has the power to create money out of thin air and to regulate banks and nonbank financial institutions.
As the fiat money
circulated through the economy, wholesale prices rose by 72 percent during that same five-year period.
Such fiat money
is anything but a storehouse of value, and only fools would keep their lifetime savings in such Monopoly money.
Taking subjective preferences seriously, Friedrich Hayek envisioned the possibility of private fiat money
nearly four decades ago.
It is unlikely that the RBI's attempt to unlock the idle gold stock and make gold behave like fiat money
will affect its inelastic demand, particularly given the rising middle class.
We have lived in a purely fiat money
system ever since -- meaning that our money's value is not backed by gold or any other physical item.
Indeed, the very fact that the link between fiat money
and gold has been broken indicates this is so.
Summary: TEHRAN (FNA)- Iranian First Vice-President Mohammad Reza Rahimi lambasted the US and other world powers for releasing fiat money
, and called it the main cause of global recession and poverty.
breaks this trinity; the lack of pain associated with its creation reduces the "value and respect" that we afford it.
With the end of the dollar-gold standard in 1971, banks became able to create as much fiat money
as they wished, mostly as a result of increasing credit and derivatives.
It may be unfair to describe fiat money
as a confidence trick but it is certainly a trick of confidence.
During the course of last year when the US Federal Reserve started its first round of pumping an overload of fiat money
into the financial system, several developing countries, most notably China, Singapore and Brazil, discussed strategies to limit capital inflows into their markets.