When a currency’s value is based on belief alone, it’s liable to evaporate.
"When a currency’s value is based on belief alone, it’s liable to evaporate." I opened my news feed this morning and saw this article "How Crypto Disappeared Into Thin Air" [FN1] with what followed was currency based on belief....
It's astonishing to me that people today still believe that the U.S. Dollar and other fiat currencies have intrinsic value.
The U.S. Dollar and other fiats are government issues and are not linked to any commodity such as gold or silver. Little do the masses realize that the buying power those little rectangular green pieces of paper they trade their time and labor for gets reduced throughout the year by inflation. The U.S. Federal Reserve shoots for a 2% Annual Inflation Rate. Do the math and you should realize that fifty years wipes the slate of any buying power. Fiat is the biggest ponzi scheme in the world!
Since there is no intrinsic value in the dollar and the government says it' s money and you think it has value then should people lose faith in a nation's currency, the money will no longer hold value.
Bitcoin, the OG of crypto, maybe intangible and digital yet it is limited to 21 Million and must be mined using your computer. The dollar has been printed to unthinkable heights. All it takes for the dollar to be pushed aside and another medium take its place is the belief " I can trade my time and labor for cryptocurrency and earn more, buy more, and support my family better than if I trade my most valuable commodity for a piece of government paper."
Not trading or investing advice. Do your own research. Opinions and observations are solely the authors.
#money #cryptocurrency #bitcoin #federalreserve #economy #fiat
