fiat theory

Fiat currency is a type of currency that exists only by government decree. It refers to the nature of the currency being untethered to a commodity with new units being easily created at will. Legal tender is a status that a government bestows on a currency, stating that it must be accepted by merchants and […]

Do all fiat currencies go to zero? History says that they do and common sense suggests that on long enough timeline the failure of every fiat currency is inevitable. Even Charlie Munger thinks so: “The safe assumption for an investor is that over the next 100 years the currency’s going to zero.” Fiat currency cannot

Fiat currency is bad for many more reasons beyond the obvious one – that it loses purchasing power due to inflation and eventually goes to zero. It has many other negative characteristics that cause economic, political and social problems. However, it is important to acknowledge the one benefit of fiat currency. Many hard money advocates

The short answer is that fiat currency is backed by the government that issues it. The government declares the fiat currency to be legal tender and mandates that its population pay their taxes in that currency. This requirement, alongside the recognition that the currency is given by the market as a means of exchange and

The economic disadvantages of fiat currency are well known and well discussed amongst financial commentators who understand the problems in our monetary system. These include: What is not discussed quite so widely is the social harm caused by fiat currency. The steady debasement of our currency is a transfer of wealth from savers and wage