The Information Age has been a period of unprecedented technological advancement and economic growth. But it has also been a period of unprecedented monetary instability. The rise of fiat money has been a major factor in this instability, and it has had a profound effect on the global economy.
Fiat money is a form of currency that is not backed by any physical commodity, such as gold or silver. Instead, it is backed by the full faith and credit of the issuing government. This means that the value of the currency is determined by the government, and not by the market forces of supply and demand.
The use of fiat money has been controversial since its inception. Critics argue that it is prone to inflation and devaluation, and that it can be manipulated by governments to their own advantage. Supporters argue that it is a necessary tool for economic growth and stability.
So, did the Information Age require fiat money? The answer is yes. The rapid growth of the global economy in the last few decades has been fueled by the use of fiat money. Without it, the world would not have been able to experience the economic growth that it has.
But would society at large actually want to return to sound money? That is a difficult question to answer. On the one hand, sound money has the potential to provide greater economic stability and reduce the risk of inflation. On the other hand, it could also lead to a decrease in economic growth, as governments would be unable to manipulate the money supply to their own advantage.
Ultimately, the decision of whether or not to return to sound money is a personal one. Each individual must weigh the pros and cons and decide what is best for them. But one thing is certain: the Information Age has been a period of unprecedented economic growth, and fiat money has been a major factor in that growth.
Agree fiat can boost the potential to fund investment in productive assets but this magic genie must be carefully managed and restricted to productive assets.
Neoliberal deregulation in most of the developed world reduced or completely removed the crucial distinction between funding of productive enterprise and non productive speculation. This is seen most in housing. The shift in commercial bank funding toward housing that occurred post neoliberal banking sector deregulation ultimately triggered the GFC.
The commercialisation of housing finance has seen the ratio of fiat debt finance issuance toward non productive assets increase steadily. This creates a drag on the productive economy and the entire nation allowing such parasitic rentseeking.
Neoliberal financialisation has created much greater inequality and generational division. Why the fuck would profit motivated bankers issue fiat debt finance toward productive assets and infrastructure if they can much more easily and safely issue it toward easy and safe housing? They won’t and don’t and have not and so the neoliberalised wests productive and infrastructure capacity has declined while the debt burden secured over real estate speculation has steadily increased
As a result of commercial banks shifting their funding toward non productive assets because neoliberal ‘reforms’ allowed them to, citizens have become increasingly burdened with this non productive, speculative debt. Savings have become rare because they are not rewarded, while debt has become a plague.
Bitcoin addresses these problems. It restores a rational basis, logic and incentive to the activity of saving. Citizens with savings are then able to make investments, without the assistance of fiat bankers. Citizens are freed of the grasping usurious tentacles of unregulated fiat debt funding and its now parasitic nature.
If fiat debt finance by profit motivated banks was restricted to productive assets and infrastructure the dysfunctionality of fiat money might be reduced but it would still leave the allocation of capital toward productive investments largely in the hands of bankers- whereas a Bitcoin monetary model would over time restore the allocation of capital to those who had accumulated it, not rentseeking bankers.
Nobody chose fiat. It was presented as a temporary thing. No voting was involved and the gold just fucking disappeared. Greatest heist in history.
Fiat currency: They create money for free, which we have to work for. Such “money printing” is a form of theft.
Let’s examine the question using the right terminology:
“Does theft speed up rate at which new technology is developed?” Obviously not.
Instead, fiat currency enabled a great deal of **malinvestment** which slowed things down.
Keynesian economics only works if the rate of innovation & growth keeps us with the rate of inflation. Once that stops, the system implodes.
I think the reason why fiat became the dominant form of money is because it is ledger based and can travel at the speed of light. It just completely outperformed all other form of money in that regard.
That doesn’t mean that other forms of money, like limited supply money that is not credit based doesn’t have it’s use case. It’s just that until Bitcoin, we never had such money that could travel at the speed of light.
I’m not an economist or anything, but what I see is that there are completely different forms of money, with different trade-offs and use cases.
I don’t think any of that will go away. It’s just that a monetary market that was completely dominated by credit money now has serious competition. There are use cases where fiat money just doesn’t cut it, like saving for example. On the other hand, credit based money is more usefull in certain cases because you can expand it and max your risk tolerance.
They are both monetary technologies and both have their pros and cons. People wo understand them as tools and utilize the right one in the right circumstances will profit. People who blindly devote themselves to one side without understanding the benefit of the other will be left behind.
This is just my current understanding of the matter. I’m always glad to get corrected.
First computer was invented under the gold standard