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No, one party's debt is still another's savings basically, even with a fiat currency. These caveats apply: * If we're talking private debt or debt from governm
by quadrangle 9y ago
No, one party's debt is still another's savings basically, even with a fiat currency. These caveats apply:
* If we're talking private debt or debt from governments other than the fiat-issuer level then there's some risk of default which means the savings could be lost.
* Without a gold standard, increase in fiat currency can diminish savings through inflation.
But simply: savings in gold ≠ savings in fiat currency, but they are both savings still.
- dragonwriter 9y ago> Without a gold standard, increase in fiat currency can diminish savings through inflation. That's true with a gold standard as well, since all that means is that printed currency is backed by a peg to gold, usually with some form (perhaps not open to all currency holders, though) of redemption pledge. It's even true with non-debased gold currency, not just gold-backed representational currency, as demonstrated by the Spanish colonial experience.
- quadrangle 9y agoOh sure, inflation can happen with gold too, like when we find more gold…