As of this this week we have managed to survive four decades of US fiat money, and its anyone’s guess how much longer we can continue. Recently we read that the average life expectancy of a fiat currency is 27 years. The world’s oldest fiat currency, the British Pound, has survived nearly 318 years, but during this term it lost 99.5% of its initial value.
Given the undeniable track record of currencies, it is clear that on a long enough timeline the survival rate of all fiat currencies drops to zero.
And as Jeff Clark points out: History has a message for us: No fiat currency has lasted forever. Eventually, they all fail.
Edmund Conway at Daily Mail writes: On 15 August 1971, with the US public finances near broken by the cost of the war in Vietnam, Richard Nixon cut the final link between the US dollar and gold. Until then, the US Treasury was duty bound to exchange an ounce of gold with central banks willing to pay them $35. Suddenly, for the first time in history, the level of the world’s currencies depended not on the value of gold or some other tangible commodity but on the amount of trust investors had in that currency. Central banks were allowed to set monetary policy based on their instincts rather than on the need to keep their currency in line with gold.
It was one of those seminal moments whose significance has only gradually become apparent, obscured as it was at the time by Vietnam and then Watergate. But the more one examines economic history, the more obvious it is that this was one of the most important policy decisions in modern history.
The term fiat money has been defined variously as:
A- Any money declared by a government to be legal tender.
B- State-issued money which is neither convertible by law to any other thing, nor fixed in value in terms of any objective standard.
C- Money without intrinsic value.
D- All of the above.
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The U.S government may be positioning to establish private currency barter of any sort as an unlawful transaction, pursuant to a recent criminal conviction of Liberty Dollar’s founder Bernard Von NotHaus for “counterfeiting” and “conspiracy,” supposedly intending to illegally mint and replace US currency with a private one using silver and gold-based coins and silver-backed paper dollars.
And the US Attorney in charge of von NotHaus’s successful prosecution, is now parlaying the conviction to say that this ruling sets forth a precedent against “…any private barter transactions that use any form of currency besides established Federal Reserve Notes and U.S. minted coins.”
The federal government also is seeking to take permenant receipt of eight tons of silver and gold ($7+ Million dollars) bullion and silver ‘Liberty Dollars’ that were minted and sold by von NotHaus.