4 ms·
I’m going to say this plainly: If you think that then you have an incredibly simplistic understanding of how fiat currency works.
by abritinthebay 9y ago
I’m going to say this plainly: If you think that then you have an incredibly simplistic understanding of how fiat currency works.
- gravypod 9y agoNoted. I'll attempt to put more nuance in my one-sentence comment next time.
- MsMowz 9y agoModern fiat currency is backed only by debt. The fact that money can be backed by debt implies that there agents have a sufficiently sophisticated ability to judge trust of other agents. It's not extremely relevant that trustworthy behavior is enforced by the state.
- abritinthebay 9y agoThis is also not true. GDP, long term economic prospects (of which debt is a part), and political stability are all major factors in fiat currency value. This is not as bad as the original oversimplification but it’s a pretry incorrect one by itself.
- havetocharge 9y agoWhat about the power to tax? All governments operate within the fiat currency framework.