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RE: Re: [Pen-l] Re: Gold money is fiat money too.



Jim Devine writes:

>> Why would one not believe in fiat money? is the US government (the
>> issuer of much of the stuff) about to go broke, fall apart in a civil
>> war, and/or be replaced by a congress of workers' soviets?

I know you are a smart guy, so I am sure I am at fault for thinking "what is Devine thinking?"

The issue is not "belief" in fiat money -- fiat money is money.  The question is whether one should believe that fiat money will retain its value compared to commodity based money.  I think there is plenty of evidence for reasonable people to believe that, over time, a dollar of fiat money is going to lose value (i.e. one dollar today will buy more goods and services than one dollar in the future), while money linked to a commodity (e.g.. gold) will not lose its value over time, especially compared to fiat money.  Is that really controversial?

David Shemano

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