Why do people have such trust in fiat currency?

When it is highly manipulated and has consistently lost value for the past century?

Back in May last year on another forum, I was mocked for suggesting that people save in silver rather than dollars. The Fed is printing like there is no tomorrow, still in the process of quantitative easing 2. This means high inflation, it is common sense. So I suggested people hold the poor mans gold, a precious and industrial metal that is going up in demand. Ever since they have been mocking me regarding it, bringing up "is this about silver" every time I made a thread; regardless of the subject.

That was back in May...

We know that now is a time of high inflation, we know that all prices are sky rocketing because of the Feds printing, yet people don't want to know about it. The idea of saving in something real, as opposed to a bit of scrap paper the government dictates is money, is strangely ludicrous to the majority. Yet the fundamentals say paper is the worst thing to be holding right now. Do they recognise that? Do they hell.

Governments around the world are destroying their currencies. They are trying to inflate the debts away, stimulate the economy by stealing money away from savers via inflation and giving it to banks, plus of course trying to competitively devalue their currencies; essentially creating a currency war. Inflation is a hidden tax, it dilutes your savings and hands the increased money supply to the government.

So why? Why do people have such faith in something the government can use to steal from you, can easily manipulate, while laughing at the idea of saving in "inflation adjusted commodities"? The fundamentals should make the ideas obvious, but most people don't want to know; and continue to trust in something that has consistently lost value for the past century.

They pay me in cash not silver.

The common man cannot afford other currencies. Leaving only the rich to get the gold, stocks, higher value currencies and land.

Peasant money for peasant people.

Thats the way I see it.

The common man cannot afford other currencies. Leaving only the rich to get the gold, stocks, higher value currencies and land.

Peasant money for peasant people.

Thats the way I see it.

samuraiguns

Silver is poor mans gold, it is something the common man can afford. In living memory, people used to buy and sell using silver coins.

The common man cannot afford other currencies. Leaving only the rich to get the gold, stocks, higher value currencies and land.

Peasant money for peasant people.

Thats the way I see it.

Back in May last year on another forum, I was mocked for suggesting that people save in silver rather than dollars. AnnoyedDragon

That was here as well. You tried to convince me that it made more sense to buy gold for my retirementrawsavon

2001 to 2009, the dollar devalued 25%, losing a quarter of its buying power.

How much do you think your savings will have lost by the time you retire? Especially now, when the Fed is QEing like there is no tomorrow.

inflation is the reason it cannot be afforded, so it is the devaluing of the monies that makes the people trust the monies? for some reason, however counter intuitive that is, it may not be too far offsurrealnumber5

People think it is too expensive because they are pricing precious metals in fiat currency. They haven't gone up in value, it is the buying power of the currency that has gone down in value.

[QUOTE="rawsavon"]That was here as well. You tried to convince me that it made more sense to buy gold for my retirementAnnoyedDragon

2001 to 2009, the dollar devalued 25%, losing a quarter of its buying power.

How much do you think your savings will have lost by the time you retire? Especially now, when the Fed is QEing like there is no tomorrow.

inflation is the reason it cannot be afforded, so it is the devaluing of the monies that makes the people trust the monies? for some reason, however counter intuitive that is, it may not be too far offsurrealnumber5

People think it is too expensive because they are pricing precious metals in fiat currency. They haven't gone up in value, it is the buying power of the currency that has gone down in value.

it's fairly obvious. to get any value out of the silver you'd have to trade with specialized people(which would be few and far in between, especially in lower populated areas). where as I can take paper money and trade with almost anyone. EndSociety

[QUOTE="rawsavon"]That was here as well. You tried to convince me that it made more sense to buy gold for my retirementAnnoyedDragon

2001 to 2009, the dollar devalued 25%, losing a quarter of its buying power.

How much do you think your savings will have lost by the time you retire? Especially now, when the Fed is QEing like there is no tomorrow.

That was here as well. You tried to convince me that it made more sense to buy gold for my retirementrawsavon

2001 to 2009, the dollar devalued 25%, losing a quarter of its buying power.

How much do you think your savings will have lost by the time you retire? Especially now, when the Fed is QEing like there is no tomorrow.

[QUOTE="rawsavon"][QUOTE="AnnoyedDragon"]

2001 to 2009, the dollar devalued 25%, losing a quarter of its buying power.

How much do you think your savings will have lost by the time you retire? Especially now, when the Fed is QEing like there is no tomorrow.

surrealnumber5

True.

BUT I am not a micromanager. I am looking at this as a 30 year investment.
I don't want to play the 'move funds around' game.

I know there will be bad years (last couple) and great years (Clinton era)
With the Cotton example, I would have had to stop my retirement funding, start funding a trade account with money that is now taxed, buy the cotton low and sell high, and then get taxed on that gain

...too much work for me

[QUOTE="surrealnumber5"][QUOTE="rawsavon"] We had this conversation already. My company matches 100% towards retirement up to the IRS limit (about 16k) So that means I get to put away 16k pretax dollars and have that matched...making an extra 16k a year (or a 100% ROI) -add to that the typical growth/return of about 7% on my dollars + an 7% growth on company matched dollars That more than offsets any numbers you will throw out ITTrawsavon

True.

BUT I am not a micromanager. I am looking at this as a 30 year investment.
I don't want to play the 'move funds around' game.

I know there will be bad years (last couple) and great years (Clinton era)
With the Cotton example, I would have had to stop my retirement funding, start funding a trade account with money that is now taxed, buy the cotton low and sell high, and then get taxed on that gain

...too much work for me

just living up to the title my mom gave me "the contrarian"

surrealnumber5

Question

When can I start to buy goods and services with my mossy rock money I've been trying to use for the past 10 years?

Question

When can I start to buy goods and services with my mossy rock money I've been trying to use for the past 10 years?

The Famous economist John Maynard Keynes once said the only reason why countries still had or tried the gold standard was because of tradition. It does a great job at providing protection against inflation and not much else. The only people who vocally call for it now are Ron Paul supporters who should really realize that Paul is just trying to make millions off the government since he owns a load of money worth of stock in gold mines.

The Famous economist John Maynard Keynes once said the only reason why countries still had or tried the gold standard was because of tradition. It does a great job at providing protection against inflation and not much else. The only people who vocally call for it now are Ron Paul supporters who should really realize that Paul is just trying to make millions off the government since he owns a load of money worth of stock in gold mines.

majrankin

you did not think out your post did you?

people are indoctrinated from birth to see the government as a benevolent deity who only does good in their name, that is how people can trust a fiat currency. it is also why they trust the government to provide services(planned economy) more than other men who must saciate the need in order to live(free market).surrealnumber5

.....Funny I hear the exact opposite.. The biggest conspiracy people are the ones that are anti government.... This post is just so wrong on so many levels.. I can't count the amount of complaining and the like about government.. Its the most complained about entity out there.

[QUOTE="majrankin"]

The Famous economist John Maynard Keynes once said the only reason why countries still had or tried the gold standard was because of tradition. It does a great job at providing protection against inflation and not much else. The only people who vocally call for it now are Ron Paul supporters who should really realize that Paul is just trying to make millions off the government since he owns a load of money worth of stock in gold mines.

surrealnumber5

you did not think out your post did you?

Lets not get a head of our selves.. Its a split idea.. You will see all sorts of economists take sides on one another.. Keynes is supported by man, but it is also shunned by many.. Your being disgenious by trying to make it out like the economics community shuns it as being incorrect, that just isn't the case.

[QUOTE="surrealnumber5"]people are indoctrinated from birth to see the government as a benevolent deity who only does good in their name, that is how people can trust a fiat currency. it is also why they trust the government to provide services(planned economy) more than other men who must saciate the need in order to live(free market).sSubZerOo

.....Funny I hear the exact opposite.. The biggest conspiracy people are the ones that are anti government.... This post is just so wrong on so many levels.. I can't count the amount of complaining and the like about government.. Its the most complained about entity out there.

[QUOTE="surrealnumber5"]

[QUOTE="majrankin"]

The Famous economist John Maynard Keynes once said the only reason why countries still had or tried the gold standard was because of tradition. It does a great job at providing protection against inflation and not much else. The only people who vocally call for it now are Ron Paul supporters who should really realize that Paul is just trying to make millions off the government since he owns a load of money worth of stock in gold mines.

you did not think out your post did you?

Lets not get a head of our selves.. Its a split idea.. You will see all sorts of economists take sides on one another.. Keynes is supported by man, but it is also shunned by many.. Your being disgenious by trying to make it out like the economics community shuns it as being incorrect, that just isn't the case.

[QUOTE="sSubZerOo"]

[QUOTE="surrealnumber5"]people are indoctrinated from birth to see the government as a benevolent deity who only does good in their name, that is how people can trust a fiat currency. it is also why they trust the government to provide services(planned economy) more than other men who must saciate the need in order to live(free market).surrealnumber5

.....Funny I hear the exact opposite.. The biggest conspiracy people are the ones that are anti government.... This post is just so wrong on so many levels.. I can't count the amount of complaining and the like about government.. Its the most complained about entity out there.

:| I take it some one forgot what interest groups are? To me it sounds like you don't hava firm grasp how politics work.. We have an entire party preaching against big government, I would say thats a pretty huge amount of peopel who havn't been "indoctrinated" but its ok, you can keep your conspiracy theory like ideas of this..

[QUOTE="surrealnumber5"][QUOTE="sSubZerOo"]

.....Funny I hear the exact opposite.. The biggest conspiracy people are the ones that are anti government.... This post is just so wrong on so many levels.. I can't count the amount of complaining and the like about government.. Its the most complained about entity out there.

:| I take it some one forgot what interest groups are? To me it sounds like you don't hava firm grasp how politics work.. We have an entire party preaching against big government, I would say thats a pretty huge amount of peopel who havn't been "indoctrinated" but its ok, you can keep your conspiracy theory like ideas of this..

[QUOTE="sSubZerOo"]

[QUOTE="surrealnumber5"] yea complaining about how they should do more though they have caused the economic issues we have today. do harm and the people want more, it takes a great level of indoctrination to do that, sounds like an abused spouse to me.surrealnumber5

:| I take it some one forgot what interest groups are? To me it sounds like you don't hava firm grasp how politics work.. We have an entire party preaching against big government, I would say thats a pretty huge amount of peopel who havn't been "indoctrinated" but its ok, you can keep your conspiracy theory like ideas of this..

:| Societal rules? You mean like POLICIES they support? You only make it sound negative because you happen to not agree with them.. Then again I really shouldn't bother to debate with some one who is a extreme libertarian.

[QUOTE="surrealnumber5"][QUOTE="sSubZerOo"]

:| I take it some one forgot what interest groups are? To me it sounds like you don't hava firm grasp how politics work.. We have an entire party preaching against big government, I would say thats a pretty huge amount of peopel who havn't been "indoctrinated" but its ok, you can keep your conspiracy theory like ideas of this..

:| Societal rules? You mean like POLICIES they support? You only make it sound negative because you happen to not agree with them.. Then again I really shouldn't bother to debate with some one who is a extreme libertarian.

well it's not backed up by metals but it is backed up by you. yes that's right you are the collateral held as the value to international banks.

look at your birth certificate and then look at a manufacturers certificate of origin.

creepy stuff and the best part is nobody knows about this. the best slave is one that does not know he is a slave.

Fiat currency makes the world go around. If it were to collapse, I doubt your gold would matter very much either, because there would be riots everywhere.

Fiat currency makes the world go around. If it were to collapse, I doubt your gold would matter very much either, because there would be riots everywhere.

EntropyWins

it's fairly obvious. to get any value out of the silver you'd have to trade with specialized people(which would be few and far in between, especially in lower populated areas). where as I can take paper money and trade with almost anyone. EndSociety

You're thinking in terms of day to day transactions, not savings. Savings in fiat currency get eroded over time due to inflation and other factors, were as savings in precious metals largely operate as a fixed point. Revaluing themselves against paper currency.

The Famous economist John Maynard Keynes once said the only reason why countries still had or tried the gold standard was because of tradition. It does a great job at providing protection against inflation and not much else. The only people who vocally call for it now are Ron Paul supporters who should really realize that Paul is just trying to make millions off the government since he owns a load of money worth of stock in gold mines.

majrankin

Precious metals weren't used as money for over 6000 years because of "tradition", it survived a free market of currencies and came out the victor as the strongest storage of value. I also have little respect for anything John Maynard said, his whole economic model is based on everyone being consumer whores that have no savings whatsoever.

Fiat currency makes the world go around. If it were to collapse, I doubt your gold would matter very much either, because there would be riots everywhere.

EntropyWins

And fiat currency would do better? Of course when things calm down and people start rebuilding, gold could be exchanged to the new currency; where as paper would be worthless.

well it's not backed up by metals but it is backed up by you. yes that's right you are the collateral held as the value to international banks.

look at your birth certificate and then look at a manufacturers certificate of origin.

creepy stuff and the best part is nobody knows about this. the best slave is one that does not know he is a slave.

Riverwolf007

I've never heard or seen any evidence to suggest that money is backed by people. I have however seen plenty of evidence that money is backed by debt.

The values of precious metals have also fluctuated greatly.

The values of precious metals have also fluctuated greatly.

sonicare

Because of, surprise surprise, paper.

When the Comex fractional reserves paper ETFs and they are counted among actual precious metal supply, you can manipulate the prices using paper.

Just one more reason why the Comex is under investigation.