Fiat Money, explained

Your dollar isn't worth the paper it's written on. Literally. There's nothing backing your dollars, euros or yen, nothing but the promise that the note your holding will be able to buy the same amount of goods tomorrow that it buys today. That's fiat money, and here's an explainer.

[paulsmith]

Being able to walk into a car dealership and exchange a hand full of paper for a car is pretty insane.

[shmeckle]

"to fund a war or bail out a bank" HAHA LOOLZ. What more can yuh say?

[artiealexis]

Money isn't real, and I'm out here chasing a check . 😅😅 #Humbled

[mountain_maniac]

Thanks a lot mate ..U made it simple to understand.

[mattm]

Lmao your savings is backed by a promise this is why I started silver Stacking.

[dpapa]

Governments controlling our money? I always though governments were there to serve us, as impartial .I think it gives governments too much power to do whatever the hell they like.

[drkcrstl]

You should have really just said fiat money is tied to no physical good.
Its only "valueable" (its not) cuz the daddy govmnt says so

[fonkvenco]

The video is essentially correct but I'd like to point out three things:
- A dollar is still worth a certain amount of gold. It's just that you don't buy gold from your local commercial bank, because they're simply not in the business of selling gold. You go to the jewelry store or to your investment bank for that, depending on what quantity you want!
- "A dollar is not backed by gold but worth only what somebody else wants to give you for it"... and so is an ounce of gold....
- Hyperinflation? Of course it has existed but iIt is hardly the first thing people should be worried about today. The Fed's and ECB's inflation targets are 2%, and they actually struggle to reach it - what policy makers are concerned with these days is the risk of *deflation* not hyperinflation!

[andrewf]

The key isn’t to “set” gold as currency by law... the key is to have a free market. The market would decide the currency via currency competition. Historically it has been gold. This is because it is rare, durable (doesn’t lose quality over time), and is easily divisible.

[benmiddleton]

The value of the currency is decided mainly by the factors- demand and supply.

If money is printed, it means the circulation of Rupees ( in case of India) in the economy will increase, though not proportionaly with dollar. The PURCHASING POWER of the people will increase as they will be having more money at their disposal. This in turn will increase the demand, which in turn will increase the inflation. The real problem here isn't inflation, it is the wage Gap that hasn't been keeping up with inflation. Since the 70s wealth for the rich have gone up 970% while wages for everyday Americans have been stagnant. That's the real problem. Closing tax loopholes and corporate incentives that benefit the top 1% needs to be addressed first and foremost. Nothing will change in this country until we do just that. Billionaires shouldn't be allowed to fuck over hard-working middle-class Americans for their Joyride. America needs to bring back antitrust laws and then this wouldn't be a problem. p.'s. The Federal Reserve is not a part of the federal government. It is a separate independent entity.

[paulkelly]

That Latin Phrase is Wrong, The phrase is, "Let it become". If people lose faith in the currency that would lead to hyperinflation, because the currency is NOT backed by Gold only the banks word to honour the face value of the paper money...

[martinjcar]

No joke. I genuinely believed it was "Fix it again tomorrow." I knew that was a joke about the car... but i genuinely thought it meant that in this context 🤔 just made sense 😆

[stratcaptain]

Its already happening, inflation is at least 3% per month.

[forlorndream]

All fiat currencies throughout the history of civilisation have eventually collapsed causing people to revert back to money in the form of gold and silver. These values fluctuate only as a direct link to the amount of currency in circulation in any given country. Remove currency and replace it with gold and silver money and it becomes the most stable system ever.
All fiat currencies are debt based and as they're not tied to gold and silver then they're tied to our labour and that of our children. We need to work to pay taxes so the government can make payments on the bonds issued by their central bank. The government uses bonds to borrow from the super wealthy and uses our labour as collateral essentially selling us into bondage via the bond system. It then encourages us to take personal debt which traps us into the system and allows them to further multiply wealth/debt creation. The only winners in a debt based fiat currency are the super wealthy who own actual money.
This is why fiat currency systems were expressly outlawed in the American constitution.

[AntonyWrightOfficial]

Quite a simple explanation but good for a quick answer and your not wrong :) subscribed!

[AC-vpss]

Best and easiest breakdown! Thank you!

[RHJunior]

less volatile??? When we were on gold standard, an ounce of gold stayed at $20 for over 130 years. The instant we went to fractional reserve the value of the dollar plummeted. by 1970 it took $44 american to buy an ounce of gold, then we went full fiat... and within 5 years it went from $44 american to $151. And since 1970 it's accelerated... an ounce of gold costs $1200 american today, with a peak of $1530 in 2011!

[novvbbe]

@1:20 An American dollar is a dollar relative to who?
Can't having nothing to back the dollar lead to messy situations beyond over printing and inflation?
In terms of currency exchanges for example, how is it based?

[christopherhart]

what is the alternative to fiat currency? you can't tie the value of a currency to a commodity because it doesn't take into account technological innovation and advancement. thats why you buy assets to make money and money is really just the blood of the economy it has to constantly move to create growth and innovation, it would stay still if u didn't have to move it.

[wiretamer]

Most currancy is abstract today. Most retail transations are plastic. The whole overprinting of money and hyperinflation thing is archaic noncence.

Hyperinflation was NEVER caused by overprinting currancy. Hyperinflation is caused by national economies are placed under siege by superpowers, creating a shortage of staple goods. The overprinting money thing is part of the effect of economic 'containment'.