Quote from: UnitedNot on July 26, 2024, 01:37:56 PM

I would like to learn more about fiat and why a fiat standard is doomed to fail. I am a complete newbie in everything economics.
Video sources are preferred but also quality tutorials are ok.

How is fiat created? Why is it debt-based? How does it create inflation? How do banks, central banks and world governments manipulate all this?
Why was the gold standard better, and what could happen under a bitcoin standard?

Bear with me, I dont know much about this thing. What would you suggest for a newbie who doesnt know much about the topic to do. The terminology will also probably be completely new to me.

THX

As we all know, fiat currency is a dollar-like currency because the government says it is, not because it is backed by physical assets like gold. Central banks produce it through printing or electronics and banks add new money to the economy through loans. It is based on lending because banks hold only a fraction of deposits as deposits and lend the rest. This can cause prices to rise if more money is brought in. Governments and central banks manage this through policy and interest rates.
Instead, unlike the gold standard where there is an absolute limit by reserves of either said or written amount, we can create infinite amounts... which would cause inflation potentially leading to prices going up Bitcoin standards with their specified limits can break price barriers but introduce risks. For the uninitiated or beginners starting with basic economics textbooks, online resources on definitions can help to understand these better.

Quote from: UnitedNot on August 01, 2024, 03:59:53 PM

Quote from: Fortify on July 31, 2024, 05:59:28 PM

If you really wanted to learn more instead of just preaching your preconceived ideas, then you would start with an open mind instead of a fixed premise that "fiat is doomed to fail". That already shows you are an extremist and likely uninterested in a rational conversation.

That is not true at all. I say that they are doomed to fail in the long run because your purchasing power disappears year after year. You said that there are currencies that have "lasted for centuries" but just because they "lasted" it does not make them good. You can keep a person on life-support for a decade but what kind of quality life is that?

Back to the fiat currencies that "lasted centuries". If your grandparents left your parents a nice sum of 100.000$ back in 1920 and your parents left you the same amount, how much purchasing power would that money get you today? Back in 1920 you could have built a house. Today maybe you can buy a bicycle with it. How is that not a failure?

I get what you are saying. Fiat currencies, inflation erodes their purchasing power over time. The example you gave is an illustration of how the value behind money wont work over decades and so some fiat currencies, that are indeed hundreds of years old (which doesn't mean more consolidated, but they can — while start decreasing in purchasing power) simply cant have these problems. The analogy of being placed on life support highlights that longevity is not necessarily improved or just better. Thus, even if this currency is sustainable, the long-term decline in purchasing power could be viewed as a serious problem for long-term stability.