Fiat Currency vs Asset Backed Currencies

Generali

Just a thought really.

Over time lots of different things have been used as currency: iron rods (where the word Drachma comes from), silver (hence a Pound (of) sterling (silver)), gold, cigarettes, chewing gum, copper, shells to name but a few.

You will regularly see a point made that no fiat currency (currency that exists by command rather than by dint of any intrinsic worth to the currency) has ever lasted. A less often made point is that no asset backed currency has ever lasted either: that can be seen by the fact that there are no true asset backed currencies in existence today.

So what do we learn from this? I reckon that we learn that money of any sort is great as a unit of account and a medium of exchange but lousy as a store of wealth.

As I say, just a thought. Have a good weekend y'all and happy US National Mulled Wine Day for tomorrow.:beer:

PaulF81

This is the first year Fiat has gone global. Who will default when everyone runs paper money? There is no need to.

Reading Ron Paul's "axe the fed" available for download on Kindle (got mine on uTorrent). Bit nutty, unfortunately, despite Ron being right, there is so much resting on Fiat (the globalised economy for example) that they will do all they can to prop it up.

chewmylegoff

The first year that fiat currencies have "gone global"??

Sorry to break the news, PaulF81, but I think your watch may have stopped at some point in 1972. It is now 2012. Time for a new watch battery.

JonnyBravo

chewmylegoff wrote: »

The first year that fiat currencies have "gone global"??

Sorry to break the news, PaulF81, but I think your watch may have stopped at some point in 1972. It is now 2012. Time for a new watch battery.

To be fair to Paul I don't think any of the Fiat currencies could truly be consdiered "global" until enough of the population has watched Dom Frisby.
We're now at that tipping point and the destruction of the worthless paper is inevitable.
Ironically, watches (especially silver ones) may actually become part of the new currency.

chewmylegoff

I have an old plastic casio watch.

Currently you would need 100,000,000 old plastic casio watches to buy the average family home.

I guarantee that in 5 years time you will see houses listed on rightmove for 500 old plastic casio watches.

Would you like to buy my old plastic casio watch?

JonnyBravo

No.
Thanks.

purch

You will regularly see a point made that no fiat currency (currency that exists by command rather than by dint of any intrinsic worth to the currency) has ever lasted

Apart from the fiat currencies we all use today, they have lasted so far, and never mind how many imbeciles continually tell us they are on the verge of disaster, they are still there, and still in use.

PaulF81

chewmylegoff wrote: »

The first year that fiat currencies have "gone global"??

Sorry to break the news, PaulF81, but I think your watch may have stopped at some point in 1972. It is now 2012. Time for a new watch battery.

Sorry, typo, meant first time fiat has gone global.

kabayiri

Generali wrote: »

...
So what do we learn from this? I reckon that we learn that money of any sort is great as a unit of account and a medium of exchange but lousy as a store of wealth.
...

All we need to do is remember the words of Lenin

"Peace, Bread, Land"

No mention of Fiats, or any other Italian rust boxes for that matter.

michaels

Never driven a Fiat currency but for the silver bugs out there this is the 1982 Fiat Argenta

RenovationMan

chewmylegoff wrote: »

Currently you would need 100,000,000 old plastic casio watches to buy the average family home.

Oh no, does this mean that you're going to create numerous 'casio sockies' to start ramping casios all over the Economy & investment boards?

I bet you won't rest until you've ramped up the casio bubble and the average house is worth just 80,0000,000 casios! :mad: