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[–] goatboy 1 point 1 point (+2|-1) ago  (edited ago)

Fiat money is when you can buy a loaf of bread for a $1 dollar spec of gold, but government mercenaries take your gold, point guns at your and the baker's heads, and demand you exchange a piece of paper with $5 printed on it for the bread. In this, both the gold and the paper become less-and-less important than the mercenaries pointing guns at everybody's head.

Communism is the purest form of pointing guns at everybody's head and therefore the purest form of Fiat Money.

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[–] NestleStoleMyWater 0 points 1 point (+1|-0) ago 

https://youtu.be/CAYkmutzcrU

Easiest 30 minute breakdown to possibly digest for normal people.

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[–] cyclops1771 ago  (edited ago)

Pants.

The analogy is "pants."

Gold is a pair of pants. You wear them, you can touch them, they can be worn by someone else. They have intrinsic and physical value.

Fiat currency is a drawing or picture of a pair pants. You can't wear them. You can trade these pictures for other pictures, but they are still just pictures. Going out in public without pants, when you get stopped, you show them the picture of the pants.

See? I have pants on!

But those aren't REAL pants, sir!

Wrong! The GOVERNMENT has declared these to be real pants, therefore, I am wearing pants!

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[–] Thissandwich ago 

Coupons.

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[–] muffalettadiver ago 

Economic supply and demand. More dollars equals each dollar worth less. It's fucking simple how do people not understand this???

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[–] badger31 ago 

Jew fuckery.

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[–] ArcAngel ago 

Flood It Again, Talmud

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[–] HuginnOgMuninn ago 

describe it to me, I'll tell you where I get lost.

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[–] 21748803? [S] ago 

FIAT money is our monetary system. It has no real physical backing (gold, etc) and is instead IOU's (Federal Reserve Notes) which are also IOU's in place of the physical gold.

In short, our banking system is like a game of Monopoly - when the Bank runs out of bills, it just cuts up pieces of paper with the value of the new bills and the game continues. Except in real life, when that happens, the value of all bills decreases proportionately, which makes all goods cost more dollars.

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[–] HuginnOgMuninn ago 

That's not enough.

You just explained inflation to me. You explained how within a gold backed currency, inflation can't happen, but it can happen within FIAT money. But inflation can happen in a goldback.

You have not even touched on the most important thing:

https://en.wikipedia.org/wiki/Fiat_money#Money_creation_and_regulation

A central bank introduces new money into the economy by purchasing financial assets or lending money to financial institutions.

Nota bene; I don't give a fuck about how you feel about my interpretation, take responsibility of it and fix it if you wish to improve your communication.