At the moment of introduction of Euro, all participating local currencies were
fiat money.
Let's examine some of the adverse effects of
fiat money that Bernanke and company choose to ignore.
Following its successful use of
fiat money in 1690, Massachusetts made multiple issues of paper currency to finance its involvement in Queen Anne's War (1702-1713).
Free-market money within a trusted network of private contracts differs fundamentally from an inconvertible
fiat money supplied by a discretionary central bank that has the power to create money out of thin air and to regulate banks and nonbank financial institutions.
They claimed that the
fiat money was inflationary and leads to the depreciation of currency, thus, the economy will be in recession and simultaneously will give effect to the hike of NPL.
Taking subjective preferences seriously, Friedrich Hayek envisioned the possibility of private
fiat money nearly four decades ago.
This scheme is based upon the limitless amounts of debt ridden
fiat money the banks are able to create out of thin air due to the fractional reserve banking system.
Fiat money is no kind of money at all but a debt owed by a government to the people forced to use inherently worthless paper as a means of exchange on pain of arrest and imprisonment.
It is unlikely that the RBI's attempt to unlock the idle gold stock and make gold behave like
fiat money will affect its inelastic demand, particularly given the rising middle class.
We have lived in a purely
fiat money system ever since -- meaning that our money's value is not backed by gold or any other physical item.
Indeed, the very fact that the link between
fiat money and gold has been broken indicates this is so.
Summary: TEHRAN (FNA)- Iranian First Vice-President Mohammad Reza Rahimi lambasted the US and other world powers for releasing
fiat money, and called it the main cause of global recession and poverty.
