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Thread: The American fiat money

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    Official Thread Jacker Senior Contributor gunnut's Avatar
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    The American fiat money

    Ever noticed those people who complain about the American dollar being fiat, not backed by "anything precious", also complains the loudest about paying taxes?

    If the money is fake and worthless, then why worry about giving the government what essentially is garbage?

    Just a random observation...
    "Only Nixon can go to China." -- Old Vulcan proverb.

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    Military Professional Prof's Avatar
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    Quote Originally Posted by gunnut View Post
    Ever noticed those people who complain about the American dollar being fiat, not backed by "anything precious", also complains the loudest about paying taxes?

    If the money is fake and worthless, then why worry about giving the government what essentially is garbage?

    Just a random observation...
    I get a kick out of the real vs fake money business, as though money were anything other than whatever most people in your vicinity agree it to be. I have a friend (well, had; he's 'way off in alcoholic hepatic encaphalopathy LaLa land now) who had a long necklace made of more or less pure gold links. Each of them was a measured weight (?1gm?). Must be worth a bunch in fake money if he still has it.

    His idea was that when civilization collapsed he would be able to buy stuff with the links when all else failed. Yep. Swap you this purty necklace for that .22 cartridge, sir.

    Prof

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    Quote Originally Posted by gunnut View Post
    Ever noticed those people who complain about the American dollar being fiat, not backed by "anything precious", also complains the loudest about paying taxes?

    If the money is fake and worthless, then why worry about giving the government what essentially is garbage?

    Just a random observation...
    just when I thought I had you pigeonholed you bust out

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    Official Thread Jacker Senior Contributor gunnut's Avatar
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    Quote Originally Posted by Roosveltrepub View Post
    just when I thought I had you pigeonholed you bust out
    Just keeping you on your toes...
    "Only Nixon can go to China." -- Old Vulcan proverb.

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    Senior Contributor antimony's Avatar
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    Quote Originally Posted by gunnut View Post
    Ever noticed those people who complain about the American dollar being fiat, not backed by "anything precious", also complains the loudest about paying taxes?If the money is fake and worthless, then why worry about giving the government what essentially is garbage?

    Just a random observation...
    Does dear GN appear pro-taxes?

    Is someone hacking into his machine again?
    "Is God willing to prevent evil, but not able? Then he is not omnipotent. Is he able, but not willing? Then he is malevolent. Is he both able and willing? Then whence cometh evil? Is he neither able nor willing? Then why call him God?" ~ Epicurus

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    Official Thread Jacker Senior Contributor gunnut's Avatar
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    Quote Originally Posted by antimony View Post
    Does dear GN appear pro-taxes?

    Is someone hacking into his machine again?
    Not at all.

    I complain about taxes but I have never said the Dollar is worthless without being backed up by gold (or any other commodity). In fact I complain about taxes BECAUSE the Dollar is worth a lot to me.
    "Only Nixon can go to China." -- Old Vulcan proverb.

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    The problem of fiat money is not their current value.
    The problem is that you can not control the future value of your savings. Unlike with gold and other physical assets, this control is entirely in the hands of governments/central banks. By one push of computer button they could wipe out your entire life savings.

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    Quote Originally Posted by andrew View Post
    The problem of fiat money is not their current value.
    The problem is that you can not control the future value of your savings. Unlike with gold and other physical assets, this control is entirely in the hands of governments/central banks. By one push of computer button they could wipe out your entire life savings.
    Mr. Goat:

    Pooh.

    The dollar, backed by whatever, trades as a commodity. It's worth what its buyers, sellers & users agree it to be worth. Just like gold, a fungible metal with an commonly agreed, not set, value. True, it has some extra or included marginal intrinsic utilitarian value, but come on. It's not edible, useable for much beyond jewelry & is lousy for making tools. It would make great bullets, but right now its collectively assigned value pretty much precludes that.

    'Physical assets" apart from gold are wealth. Of course. But this "gold-has-intrinsic-value" business needs a quietus. It ain't the case. As if a new company providing some new product to an eager & receptive market isn't "making money" (that uniquely American phrase = creating wealth) no matter how much that wealth is completely detached from a metal value standard.

    If you can buy things with the money it's money. Gold, paper or plastic. Selah.

    Prof

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    Is this related to those people who complain about losing cash in currency reforms, but then keep like a quarter million bucks in cash under their matress instead of converting it into solid physical assets - because then The Man could track it and - omg - possibly tax it? Or do those only exist in countries that have semi-regular currency reforms?
    (I know an old man with that syndrome who experienced and complained about the '23 and '29 depressions, the '48 Deutschmark introduction and the '02 Euro conversion...)

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    Official Thread Jacker Senior Contributor gunnut's Avatar
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    Quote Originally Posted by andrew View Post
    The problem of fiat money is not their current value.
    The problem is that you can not control the future value of your savings. Unlike with gold and other physical assets, this control is entirely in the hands of governments/central banks. By one push of computer button they could wipe out your entire life savings.
    What value does gold really have? Can't eat it. Can't drink it. Can't keep me warm. Can possibly keep me cool since gold is a very nice conductor. Can't fashion it into any kind of tool since it's so soft.

    Gold's only practical purpose is that it's a very nice conductor.
    "Only Nixon can go to China." -- Old Vulcan proverb.

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    Official Thread Jacker Senior Contributor gunnut's Avatar
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    Quote Originally Posted by kato View Post
    Is this related to those people who complain about losing cash in currency reforms, but then keep like a quarter million bucks in cash under their matress instead of converting it into solid physical assets - because then The Man could track it and - omg - possibly tax it? Or do those only exist in countries that have semi-regular currency reforms?
    (I know an old man with that syndrome who experienced and complained about the '23 and '29 depressions, the '48 Deutschmark introduction and the '02 Euro conversion...)
    This is just one of my random observations.

    There are a lot of Americans who complain about our money not being backed by gold. They say our money is fiat, like Monopoly money that the government just cranks out. The dollar is worthless, they say.

    My argument is if the dollar really is worthless, then these same people shouldn't complain about paying taxes. Why argue about giving government back what essentially is trash? If they care about parting with their money, then that very act makes the dollar valuable and blows a hole in their theory.
    "Only Nixon can go to China." -- Old Vulcan proverb.

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    Quote Originally Posted by andrew View Post
    The problem of fiat money is not their current value.
    The problem is that you can not control the future value of your savings. Unlike with gold and other physical assets, this control is entirely in the hands of governments/central banks. By one push of computer button they could wipe out your entire life savings.
    Imagine what would happen to gold if a large cache was discovered somewhere or if it ever lost its ornamental value...

    Bottomline, any currency (seashells, gold, paper money, tobbacco) is worth whatever market participants are willing to pay for it.

    And by the way, in a free market society how exactly do the government affect your life savings by "one push of computer buton"?

    Government actions (excessive borrowing, public financing and so on) do create an impact, but so do many others events.
    "Is God willing to prevent evil, but not able? Then he is not omnipotent. Is he able, but not willing? Then he is malevolent. Is he both able and willing? Then whence cometh evil? Is he neither able nor willing? Then why call him God?" ~ Epicurus

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    Unlike paper money gold, silver, platinum cannot be created or terminated dy decree.
    It’s true that the real usefulness of precious metals is negligible. But this fact didn’t prevent them from being the only reliable means of storing value for thousands years.

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    Official Thread Jacker Senior Contributor gunnut's Avatar
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    Quote Originally Posted by andrew View Post
    Unlike paper money gold, silver, platinum cannot be created or terminated dy decree.
    Itís true that the real usefulness of precious metals is negligible. But this fact didnít prevent them from being the only reliable means of storing value for thousands years.
    Lead cannot be created by decree but you don't see anyone using it as a store of value. Lead is pretty rare too, and has industrial uses.

    Gold is worth something because people place value in it.

    Dollar bill is worth something because people place value in it. If there's more, then the value goes down. Just like everything else.
    "Only Nixon can go to China." -- Old Vulcan proverb.

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    Quote Originally Posted by andrew View Post
    Unlike paper money gold, silver, platinum cannot be created or terminated dy decree.
    Itís true that the real usefulness of precious metals is negligible. But this fact didnít prevent them from being the only reliable means of storing value for thousands years.
    Are you talking about some sort of customary, grandfathered value? Gold is valuable because "...his cohorts were gleaming in purple & gold..." & those cohorts did all that gleaming a long time ago?

    "The Assyrian..." in that illustration could get the same $2K+ today for each ounce of that gold (minus this & that carrying charge) that I can get at the same time & place for my father's signet ring or watch, or my alky buddy above could get for his necklace. Tomorrow Sennecherib could get more, or less, depending on the market. Just like pork bellies, carrots, tobacco or dollars. There is absolutely nothing magical about the metal except for the fact that, historically, its value was set for a long time by the government. People railed against that for years. OK. Now it's not. Its price has gone up. Fine. 'Bout time. Up. Down. Whatever. All freed up. Not magical anymore, tradition or not.

    Prof

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