Quote:
Originally Posted by Messianic
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... why people trust paper money (a notion people laughed at 150 years ago) based on the promises of an institution that has the power to make as many of that paper money as they want without even having to print it or tie that money to some kind of solid standard.
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Whenever I think about this it kinda blows my mind. The only reason paper money (fiat) has a value is because of a perception, and everyone is on board with it. Or even worse, money in the bank: Its just a number on a register or a computer, yet someone will give me real stuff for this vaporous number. Its kind of a big system of trust.
Scary part is when the trust goes away (i.e. faith in US or any currency) so does that perceived value. You could conceivably be a multimillionare and wake up one day and not be able to buy anything if the system crashed overnight.