Quote:
Originally Posted by ToothSayer
This is a common myth. I've addressed it above. Economic collapses were far more common under the gold standard. There's nothing to stop you using all the gold in your coffers, then promising future economic output to borrow more.
It's corruption, wars, dumb policies (aka socialism), a worthless population, that wreck economies, not fiat. Hyperinflation is just the end stage fever trying to kill off the infection.
Economic collapses being more common/frequent under gold is actually the argument made for it. The argument against fiat is that the collapse can be pushed further and further back via government borrowing and printing money until the eventual collapse of the bubble is catastrophic.
Indiscriminate spending is nearly guaranteed under democratic rule which is why central banks have to be "independent" to put the brakes on. Unfortunately in most cases they're far from independent. It's naive to think that Trump would allow rates to rise sufficiently to curb his unsustainable debt spending.
The corruption/wars/dumb+worthless people that wreck fiat are inevitable. An infinitely sustainable fiat system is no less a utopian dream than communism. Fiat systems will always be pushed to their limits until eventually a "black swan" (or just something completely foreseeable) pushes them over the edge.
When the end of this cycle eventually leads to economic disasters in major economies, backed currencies will probably be a thing again. Bitcoin won't back them but it's not unforeseeable and probably wouldn't be the worst idea to have government currencies based on a sovereign crypto with fixed or restricted monetary policy. They could be defined constitutionally and therefore pitched as "immune" from manipulation/corruption until they're eventually changed again. And if that happens there will definitely be a huge market for "digital gold".