Post
Topic
Board Economics
Re: Fiat Money is a Bubble
by
Memminger
on 08/11/2019, 18:55:20 UTC
Since many people try to convince us that Bitcoin is a bubble and how we will lose our money eventually, I wonder if money is not a bubble actually. There exist economies in which money has a positive value in spite its market fundamental is zero. That means fiat money has zero value. Fiat money is a social contrivance. We take money from other people because we know other people will take it from us. In theory and practice the fiat money is a bubble.
Its not a bubble because its value don't seem to skyrocket and pop. It only bubbles due to its infinite supply but the value keeps on inflating and not backed by anything.

You don't even know it for yourself if it is a bubble or not by saying two statements that contradicts each other to make things complicated and unclear, although your second sentence sums it up already, it is a bubble because clearly fiat doesn't have anything on its back to prevent inflation that's cause currency devaluation, if that is not a bubble to you, I don't know anymore what bubble's look like to you.
Though I can’t say that some fiats aren’t really back by anything because a long time ago a country could only produce fiats based on their gold and silver results and I I remember correctly the US government had passed a law to untie the fiat from the country’s reserve. So the question might be, where does the fiat get its value from? Is it from the trust of the people? Or rather the circulation keeps going on and on since it had already taken a deep root in our society that some countries don’t need to back their fiat of something to stabilize its price?