What Does The Fiat Currency Collapse Mean To The Middle Class?
There is little understanding among the middle class about the true ramifications of a fiat currency collapse and the effects that it will have. Most people do not even know what a fiat currency is. A fiat currency is essentially an invented money system whereby there is no actual commodity, nothing of real value, backing the system. The whole power of the fiat currency comes from popular support and faith in the government and their regulation of the printing and production of new money. History and practice has shown fiat currency to be unsound. The current state of the economy shows it still to be unsound. There are a wealth of problems associated with its use as an economic base.
Ever since Roman times, the experiment of fiat currency has existed. And every time fiat currency collapse because the fiat currency is devalued.
Originally achieved by lowering the silver content of their money, the eventual outcome was a coin with less than .05 percent silver. The people of Rome soon began to realize that their currency was worthless. China experienced the same phenomenon. In order to deal with lack of hard commodities to use as money, the printing of paper money was taken up by the government. Theoretically, these paper notes should have been exchangeable for gold, silver, or silk, but when the economy got bad these commodities were not available in such supply, which led to a fiat currency collapse. The uses of fiat currency throughout time have almost always occurred in times of financial stress. The U.S. used fiat currency to support WWI and WWII, but in these cases the dollar was still backed the gold standard. That worked well for the U. S. dollar because the Europe paid the U.S in Gold. In 1971 Richard Nixon took the US dollar off the Gold Standard and created the fiat currency that it is today. History has always shown it to be the case that either a fiat currency collapses or the government preemptively shifts back to a commodity based standard.
In the modern U.S. statistics are showing a consistent inflation rate in the fiat currency. It is currency inflation because when the central bank (The Fed) prints fiat currency out of thin air then it results in fiat currency inflation.
This inflation has been shown to lead to hyperinflation, whereby the fiat currency collapse removes all confidence of the citizens in the artificial money. The U.S. has a long history of shifting back and forth between fiat and gold standard systems, which has kept it safe so far, but the current system has been going for more than 30 years and the resulting statistical spike in the economy is an unheard of event that signifies a much greater problem on the horizon.
To make things worse, the Federal Reserve, which issues the paper money, is in no way controlled by the Treasury Department of the United States, which means that, essentially, every fiat currency dollar printed is a dollar owed by the U.S. government to a private corporation.
The gold standard has inevitably replaced every fiat currency system that was attempted for the last 3000 years. The collapse happens at such a rapid pace that there is no chance for people to exchange, even if they could, their paper money for the more tried and true gold or silver, or, in the modern age, oil commodities that would ensure that their wealth would survive a severe economic downturn. With the advent of world media and the internet, the trends can be seen better, but this still does not insulate the general populace against the dangers of a fiat currency collapse. The trends that people have exhibited in buying these commodities shows that there is already a lack of confidence in the fiat system.
There is no way to avoid an economic chaos because the fiat currency collapse is inevitable with a flawed economic system that is destined to repeat history.