> The value of a dollar is less than 1% of what it was when my grandparents were young. A 99% tax over 80 years or so.
You could view it as a tax. Or you could simply view it as erosion. How much would your car be worth after 80 years….

– You could, but… it turns out that time is not the only factor involved. The “taxers,” per my first comment, are taking action to make this happen, AND getting benefit from it. (Creating dollars and spending them on projects that gain them some benefit.) Hence my insistence that “tax” is more appropriate.

> Before there was currency and gold there were barter systems. Did people expect the goods that they exchanged for other goods to retain their value if they weren’t traded?

– Which is why, of course, that they used silver, gold and copper - things that did not easily corrode.

> It’s the same with fiat currency. Should you still expect to buy the same amount of goods for, say, a plumbing job you did 30 years ago as opposed to one you did yesterday?

– See above.

Maybe there ought to be a statute of limitations on what society owes you. (With the exception of retirement benefits, of course…)

– I don’t think “society” (whatever that is) owes me anything at all. I just want it to leave me alone.

PR

You could view it as a tax. Or you could simply view it as erosion. How much would your car be worth after 80 years, whether you ever drove it or not? Maybe it would be a priceless antique, but only if not everyone still has their 80-year old cars in their garages.

Before there was currency and gold there were barter systems. Did people expect the goods that they exchanged for other goods to retain their value if they weren’t traded?

It’s the same with fiat currency. Should you still expect to buy the same amount of goods for, say, a plumbing job you did 30 years ago as opposed to one you did yesterday? Maybe there ought to be a statute of limitations on what society owes you. (With the exception of retirement benefits, of course…)

The real issue is adoption of online money, not what commodity or commodities the initial online currencies happen to use as a connection to the real world. All of the technical problems to make this work have been solved - adoption is a marketing problem - and Gold has a lot of marketing appeal.

Let’s start with this: I do not seek perfection, and a single flaw in something is no reason to toss it out the window. The “gotcha” emotion is highly misleading and destructive. Now…

I am not an economist myself, but I have discussed this with some very good ones. They tell me that it is not a major problem.

But, let’s say that they are wrong. There were certainly a number of crashes when the world was mostly on a gold standard, in the 19th Century.

The question is this: Which is worse, an occasional crash, or the evils of fiat currency?

I’ll take an occasional crash over fiat. The value of a dollar is less than 1% of what it was when my grandparents were young. A 99% tax over 80 years or so.

And, we’ve had crashes anyway!!!

You simply cannot give politicians the ability to create money out of thin air and have it turn out well.

I’ll take the problems of a gold standard any time. Again, I’m not looking for perfection, and…. fiat currency most certainly doesn’t provide it!

PR

The problem I see is, a currency based on gold wouldn’t inflate—not even a little bit, like 1% or 2% a year, meaning it would halve in value every generation or two. Quite on the contrary—it might actually *deflate.* That would mean, however, that, while nearly everything you own depreciates in value over time—your car, your house, your clothes, your furniture—your cash would not. And that would mean that, unless there are *really* lucrative investment opportunities out there, promising even greater returns than your money itself, it would be the most prudent thing not only to sit on as much cash as you can but also to hoard as much more of it as you can.

And that could very well cause a deflationary depression, with more and more money going out of circulation, staying in people’s pockets, who would beggar each other out. That would increase the deflation even more, meaning it would make even more sense (on an individual level) to hold on to your money than to spend it.

There is a reason why fiat currency was originally introduced, and I’m afraid that, even though government mismanagement and high national and international debt can send it into a hyperinflationary spiral, a substitute currency that doesn’t inflate at all couldn’t possibly replace it without bringing the economy to a grinding halt.

Of course it needn’t even be an official currency. The rise in commodity prices all over the place, including gold, is based on the same dynamics, essentially…