Quote from: hashman on January 30, 2015, 01:29:48 AM

Quote from: DanielT on January 29, 2015, 04:55:40 PM

USA (and other countries) have a powerful army they use to back fiat.

I never understand what people mean by that. Can I bring my note to the bank and they will give me a soldier?
The army is a huge cost to an average fiat holder/user, not a benefit.

Well the military of Germany, which was maybe the best between the wars, did not help the value of their money. One example is enough to defeat that argument.

General trust in the power of the managers of some fiat is of course important for the speculators (which basically are everybody), but oversupply of money can take any currency down.

To wage a war, which is extremely costly, a government has to confiscate a large portion of the productive workers for soldiers, turn much of the rest of the economy towards war production, confiscate private assets that can be used in the war, loan the financial wealth of the citizens in the land through war bonds, confiscate the value in the cash holdings of the citizens through money printing. Basically, they take everything. No wealth, no investments, bad productivity, poverty. Running a big war machine will make people poor and in the end crush the money system. So I would not bet on the military to keep the money afloat.