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Fiat currency works because the issuing government guarantees its value... When a government can no longer guarantee its value, it's worthless (see Zimbabwe).
by Mikeb85 13y ago
Fiat currency works because the issuing government guarantees its value... When a government can no longer guarantee its value, it's worthless (see Zimbabwe).
- ericb 13y agoHow is it guaranteed, exactly? At what government office can I turn it in for...something that isn't more paper? Essentially, the argument usually reduces to "because you can pay your taxes with it and not go to jail" which is a neat trick, because the amount due for those taxes is at the government's discretion, as well as the amount of dollars in existence. Dont-throwme-in-jail-coin (USD) has a value, but lets not pretend it is more reified than an additional direct payment use case for governmental extortion. What's the difference if you can trade a given currency for USD with one more step and achieve your tax-paying ends?