Monday, July 13, 2015

Fiat money

The beauty of the fiat currency is that it is backed by nothing.
It comes from nothing and it could easily go into nothing.
And most probably it will.
If money represents an economy but has no value in itself, easily THE VERY SAME ECONOMY could be represented by A NEW CURRENCY and nothing would change.
WELL SOMETHING would change, for people who have THAT MONEY.
They would probably lose most of it.
But MODERN economies are mostly backed by debts (and not SAVINGS) so, when the currency implodes, so does the debt.
Creditors have the nothing they created and debtors have the assets they bought.