Complete Fiat Replacement

I dont read you. What do you mean "fiat"? -PP

Can someone tell me what fiat is? -PP

Penny, as I understand it, and quickly, fiat currency is anything that a govt or ruling authority declares as the vehicle for paying taxes and then establishes what it's worth is in that process. So, an artificial currency in which it's value is completely without basis.

I think this is right. Been awhile since I have studied anything about it.

Jim

pennypusher and others:
Fiat money is the money we use today--basically a form of currency not backed by gold, silver, or anything other than the word of a bank/gov't. Argueably, (as I'm sure this topic will show to us lol), it is the primary cause of inflation and debt in a nation. As far as I know, every sinlge nation in the world uses this system today. That was not, however, the case as recently as 100 years ago. As with any system there are pros and cons. I can't think of any pros off hand, but I'm sure if I think hard enough about it I can come up with a few....i think? hehe Seriously though, go ahead and do a little research online--Google can help massively. Look up something like "basic Austrian thought" for the free market view and "keyensian school of thought" for the planned economy believes. Keyensian and Austrian are, in my opinion, the best of both sides. They both raise their arguements and back them up with good, old-fashioned theory.

Be SURE to get both sides of the arguement and form your own opinions--without having at least a basic knowledge of both sides you really can't (shouldn't) form an opinion one way or the other. If you have questions, never be afraid to ask them here--many of our members are very knowledgeable (and full of passion!) when it comes to these topics. I, personally, can help you, albeit slightly baised-ly, with the Austrian School, and I've been able to spot others with similiar beliefs who I'm positive would help too. Any Keyensian fans on this board would be more than happy to help you out too I'm sure.

...........

Barter-systems encounter the same problems that gold, silver, paper, women, beads, seashells, finger-nail clippings, credit, blood, children, tobacco seeds, or anything else used for trade--they are only as valuable as the other guy says. The problem I have with the "paper and ink" is the fact that I already have alot of paper--and it costs 50+ of them to fill my car with gas! That's not right, considering I take in less then 300 "pieces of paper" a week. In a fiat system, it seems to me, that the poor get poorer and the rich get richer. While of course there is still a middle class in this land and some of them do eventually "move up" to the upper class, it has been my experience that it is much more likely you will die in the same class you were born....maybe even move down a notch or two. With fiat money, the Cost of Living goes up much faster than Income and Wages. Use gasoline for example:

Septemeber 10, 2001--gasoline cost $1.25 per gallon in Manhatten.
March 13, 2008--gasoline costs $3.65 per gallon in Manhatten.
IF your car holds 20 gallons and get 20 miles to the gallon (easier math for arguement sake) the prices look like this:
September 10, 2001--$25.00 to fill your tank every 400 miles
March 13, 2008--$73.00 to fill your tank every 400 miles.
Now lets look at wages:
Septemeber 10, 2001--$5.15 per hour is minimum wage...$206.00 a week before tax
March 13, 2008--$7.15 per hour is minimum wage...$286.00 a week before tax
Now lets crunch soem numbers:
9/10/01--$25 a week out of your check of $206 is roughly 1/8 your check
3/13/08--$73 a week out of your check of $286 is roughly 1/4 your check
My point exactly. If CoL goes up faster than wages, obviously its bad. This can of course happen with any system in place. It is the Fiat system that is in place right now as this is happening, and thus the "unfound" hatred for the system exists today. A barrel of Oil is still traded for, roughly, the same amount of silver that it was in 1913, pre-Fiat. It does, however, cost rougly 17X what it did in US Dollars. Don't know about you, but I'd be happier with the $5.15/hr and only spending $20 bucks a week on gas...

Would a gold and silver standard solve all out problems overnight and bring peace and riches to the whole world? Umm probably not. Problems will always exist. The least we can do is try and limit those problems by establishing a system based on freedom--freedom to decide for yourself what you accpet as payment. Afterall, anything and everything is only as valuable as YOU think it is.

And that's all I have to say about that,
--Gary

EDIT: and for the record, Federal Reserve Notes are a form of Bartering. You walk into the corner deli and tell the guy behind the counter you want a cup of coffee--you in turn TRADE him $1.25 in Fed Res Notes for that coffee. It would be the same if we used silver--a Morgan for a copy of "Micheal Clayton" DVD. All money is is a way to make bartering easier. I sell coffee for a living. Its alot easier to take FED RES NOTES for a cup then turn around and buy a pack of gum with those same notes than it is to walk around town with a bunch of coffee trying to trade for a pack of gum. It is the exact same system just made simpliar.

Maybe the Electric Co. would accept those Ron Paul Silver Dollars....hee hee

And all this time I thought a FIAT was just an expensive car that needed fixin all the time.

There are not enough notes or coins in circulation to match the wealth of all depositors. It is increasingly becoming a system of "credits" over one of physical cash.

I need to confess, I was poking fun at the idea, sometimes stated in this forum, that fiat monetary systems are unsound.

I enjoy lively debate.

Thanks