All This Fuss About A Fiat Dollar Authored by Jeff Thomas via InternationalMan.com, Throughout the First World, and, particularly in the US, there is an increasing consciousness that fiat currency, far from being the solution to economic problems, is, in fact, a cause of them . There are even those who, over the years, have predicted that the continued massive creation of fiat dollars may well lea...
All This Fuss About A Fiat Dollar Authored by Jeff Thomas via InternationalMan.com, Throughout the First World, and, particularly in the US, there is an increasing consciousness that fiat currency, far from being the solution to economic problems, is, in fact, a cause of them . There are even those who, over the years, have predicted that the continued massive creation of fiat dollars may well lead to price controls, destruction of savings, looting, riots and, possibly, even revolution. A decade ago, such predictions were regarded by most as nonsense. Today, all of these eventualities seem more likely, although there still remains a strong contingent (possibly even a majority) who believe that, “It can’t happen here.” A Brief History of Colonial US Fiat Currency At this juncture, with regard to the US, it may be helpful to mention that not only can it happen here… it in fact, already has – back when the US was first created. Much has been said about the American founding fathers having been “visionaries,” and this is most certainly true. But how was it that so many people in pivotal positions in late 18th-century America possessed such insight, such inspiration in terms of designing a country whose Constitution was based upon free-market values, and avoided, as much as possible, a central government that had its fingers in the economic pie? The answer lies in the simple fact that they had not only experienced the outcome of the use of a fiat currency , but had done so in recent memory . In the 1750s, the use of fiat currency by the colonies (particularly in the financing of military endeavours against the French in Quebec) caused massive inflation. The situation became so dire that Mother England stepped in and called an end to the creation of debt-related promissory notes. There was an immediate return to using coinage. The result was prosperity. Although the colonies did not yet possess their own coinage, they used gold and silver coins from England, France, Holla...