Marvelous Essay

jpete wrote:No one "wants" it.

But they "accept" it and pretend it has value.

The courts enforce the FRN's acceptance as "legal tender", and they also dictate the rejection of any similar medium of exchange. One of the means of enforcement is by ruling that only FRN's can be used to pay taxes.

The only thing wrong with paper money is human fallibility. The temptation to print too much seems to be irresistible.

franco b wrote:The only thing wrong with paper money is human fallibility. The temptation to print too much seems to be irresistible.

Do you anticipate that humans will someday soon become Angels, or is there a plan 'B'? Every fiat currency throughout history has eventually at some juncture reached a value of zero. Perhaps this time it will be different though. Since the US Dollar only went 100% totally fiat in 1971, we are now only a mere 41 years into this monumental (or should I say foolish) experiment. Will it last another 41 years?

lsayre wrote:

franco b wrote:The only thing wrong with paper money is human fallibility. The temptation to print too much seems to be irresistible.

Do you anticipate that humans will someday soon become Angels, or is there a plan 'B'? Every fiat currency throughout history has eventually at some juncture reached a value of zero. Perhaps this time it will be different though. Since the US Dollar only went 100% totally fiat in 1971, we are now only a mere 41 years into this monumental (or should I say foolish) experiment. Will it last another 41 years?

The only plan "B" I can envision is to have the dilution of the dollar so bound about by law that it would be much more difficult to do. At least it would slow it down. At this point in time inflation is the only way to get out from under the massive debt. This is a form of default which is inevitable, but a more gradual one and with less turbulence.