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It's actually fiat money that makes it possible to escalate conflicts to such a disastrous level in the first place. If you're on a gold standard and your war
by _0ffh 4y ago
It's actually fiat money that makes it possible to escalate conflicts to such a disastrous level in the first place.
If you're on a gold standard and your war chest starts to run out, you must either find a wealthy lender (hard), press the plunder of your citizenry (limited & bad for morale) or start thinking about a peace deal.
With fiat you can just fire up the printing presses, the later consequences be damned (should you even be aware of them). The first one to have their economy collapse loses, but in the meantime the slaughter can go on.
- rory 4y agoThis train of thought is logical, but what is the practical application for a given nation? Even if one were to abandon fiat money, there's no way to force their adversaries to do so as well. The game theory seemingly pushes everyone to run the printing presses, so to speak, now that the fiat toothpaste is out of the tube.
- dragonwriter 4y ago> It's actually fiat money that makes it possible to escalate conflicts to such a disastrous level in the first place. Yes, one of the failure modes of commodity/representational currencies is that in emergencies—natural.or artificial, war or peace—your state and economy collapse before they would run the risk of hyperinflation with fiat money. That's one of the reasons those systems have been abandoned generally. (Oddly, goldbugs see this as a selling point of commodity currency.)