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<p>[QUOTE=&quot;fatima, post: 1249065, member: 22143&quot;]Then you fundamentally don&#039;t understand it.&nbsp;&nbsp; Fiat currency, distilled down, represents nothing more than a future claim on someone&#039;s labor.&nbsp; Note this is quite a different paradigm than an asset based currency.&nbsp;&nbsp; Because the FRN is claim on the future, this means it is a debt and debt involves interest.&nbsp; It&#039;s this interest component that cause the system to fall apart.&nbsp;&nbsp; Currency enters the system by two methods.&nbsp; First spending by the Treasury.&nbsp; When the Treasury spends money it is borrowed from the Federal Reserve.&nbsp; Interest is owed on this money.&nbsp;&nbsp; Second is through the Federal Reserve system of banks.&nbsp;&nbsp; When a bank needs additional currency from the Federal Reserve, the Fed creates it and hands it over to the bank.&nbsp; There is interest on this created money as well.&nbsp; &nbsp; (I&#039;m ignoring fractional reserve banking as it&#039;s not relevant to this point)</p><p><br /></p><p>The only way to account for this interest is to expand the money supply.&nbsp;&nbsp; It has to happen, it&#039;s simple math.&nbsp;&nbsp; As long as this base money remains out there, then there is interest on it.&nbsp; It&#039;s why fiat systems fail.&nbsp;&nbsp; BTW you never answered the question on what Fiat system has lasted 100 or even 50 years.[/QUOTE]</p><p><br /></p>

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