Message:

<p>[QUOTE=&quot;Drusus, post: 781338, member: 6370&quot;]Its not in our head...its been made so in the very real world by the so called authorities...I can think in my head &#039;gold has no value&#039; but that wont make it so in the real world which we must live. It IS a concept but one that had very real consequence and has been implemented in a very real way so you cant just &#039;get over it&#039;. </p><p>&nbsp;</p><p>Fiat money was around as far back as Rome. When you see a big bronze coin that has SC on it...how I understand it is that SC is the senate of Rome basically &#039;signing off&#039; on that coins value as it was bronze and not silver or gold so the coins required the backing of the senate to transfer monetary value to it.</p><p>&nbsp;</p><p>I also tend to agree that gold and silver value is exactly what the masses have placed on it, not to say that one cant look at different substances like Gold Silver, and paper and rate these substances inherent value, rarity and unique properties thus placing value on them on a very real basis.</p><p>&nbsp;</p><p>I disagree that the term means nothing...its just subjective in relation to the norms of a chosen system. If corn was deemed to be the value system to be used for money, and all money was made of corn...then they decided to instead use rocks (which they deem far less valuable in this imaginary scenario) then the rock money would be fiat, someone would have to use their authority to transfer the value to the money made of the lesser valuable item. In the real world people long ago saw gold, saw it has unique properties, its appearance, and it was a more rare metal. They deemed it to be valuable (even salt has been used as a basis of value). Silver and bronze were also deemed valuable but lesser than gold. Much of the world ended up valuing their money in these terms. Fiat in this case was when people decided instead to print onto paper or other substances deemed (again, usually based on good reasoning) less valuable and call THAT money. Paper certainly isn&#039;t gold and I would even argue that for several reasons it ISN&#039;T as valuable or as rare as gold...so someone had to use their authority to attach a relative worth to it.</p><p>&nbsp;</p><p>Certainly in the beginning someone had to attach authority to the value of gold and I can certainly see why it wasn&#039;t that hard to convince people that this metal was special. In the end, all money could be said to be fiat because there MUST be a system and there must be an authority that places that value and enforces it and the people must go along with it. But in many cases when someone calls something fiat, they simply mean money made of something that is deemed to have lesser value compared to something they see as having real value relative to a certain valuation system.</p><p>&nbsp;</p><p>It is not what YOU think is valuable but more what system has been put in place and is in use. Everything is relative to what system is being used. You can say gold is just another metal, and it might be, but men have put great value on gold long ago and still do today and in the end, this system was the norm and when people chose to discard this system, then some authority had to endow similar value to something they saw as far less valuable and in this we get the term &#039;Fiat&#039; which simply means &#039;by decree&#039; which basically means &#039;because we said so&#039; and is commonly used to refer to money that is made of something that is of far lesser perceived value than what that particular system deems to be valuable enough to be money. </p><p>&nbsp;</p><p>then again...how long have we been off the gold standard? How long does a system have to be in place until it stops being fiat and becomes the norm. </p><p>&nbsp;</p><p>In WWI the Germans minted and printed money on almost anything and everything...they were doing this contrary to the established gold standard. Many of these bills even said on them they would be exchanged once they get back on the gold system, that these coins and bills were fiat, they had no value save for what some governing body had decreed they have. That was a typical &#039;fiat&#039; situation.</p><p>&nbsp;</p><p>Lastly I would say to those people who are hoarding gold in a panic because they think the monetary system will collapse...will that gold still have worth in monetary terms without a monetary system or an authority to place value on it? Gold has inherent value but as money it only has the value given it by an authority. Germans found that you could have gold but if you didn&#039;t have a working economy, a system with authority to up keep a value system, gold wasn&#039;t going to buy anything if there was nothing to buy.</p><p>&nbsp;</p><p>So in short, I think the designation of Fiat money is valid but relative. No need to get upset about the use of the term...but then again, how long after a system has turned fiat does it just become the norm. If people STILL believe only money made of, or backed by, precious metals is correct...then certainly we are still in a fiat system....and I think this is true because I think the most people still place FAR MORE inherent value on gold than a piece of paper with a some graphics stamped on it. That paper (that has been printed on so you cant even use it to write on) only has any real value at all to anyone because the government says it does while people still see inherent value in precious metals and things that are rare.[/QUOTE]</p><p><br /></p>

Your name or email address:

Do you already have an account?

• No, create an account now.
• Yes, my password is:
• Forgot your password?

Stay logged in