Saturday, February 28, 2009

Fiat Money Rant

I'm used to reading a lot of poor economics writing. I'm more used to it coming from the political left, however, there's a whole bunch of it coming from the far right of late. There's just one thing I want to say:


Okay, I'm better now.

Money is a contract. Rather than simply bartering for goods, you sign a standard contract in the form of currency to be paid at a later date. A government then acts as the guarantor of the contract. The only difference between the "gold standard" and a "fiat" currency is that the gold standard specifies the liability precisely by fixing the price of a commodity, whereas the "fiat" currency allows all prices to float.

Without the guarantee of the government, however, there is no gold standard. The gold standard is a fiat currency like any other.


Blogger Mark Herpel said...

Get rid of the dollar and bring back honest money or at least allow the states to use it. There are still 5 states with pending honest money legislation. We have devoted an entire issue to it this month on DGC Magazine


9:07 AM  
Blogger Octavo Dia said...

There is no honest money. Aside from barter, I have never read of any analysis of money which is both "honest" and useful as a currency.

9:22 PM  

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