Is fiat so bad?

[Anonymous No.29992450]

I just don't understand, /biz/. I've been investing for 5 years in both crypto and stocks and I hear so much FUD about the money printer.

Now I know you should definitely not store your wealth in fiat. That's just a no-brainer. But the dollar is not unbacked currency. It's backed by debt. By someone having a contract that they'll have to pay back interest in USD at some point in time. So why would we get actual hyperinflation? The dollar loses value constantly, but that's by design because it's not even meant to store value. But a dollar will never be worthless because someone's always going to have interest to pay in USD CONTRACTUALLY. In fact, it seems like a better backing than gold long term concerning things like astromining coming in the not-so-distant future. Economic bubbles were also a thing waaay before fiat was a thing.

I'm not trying to shill for the FED. Quite the opposite, actually. I'm just trying to figure out if I'm missing something.

[Anonymous No.29993105]

>>29992450
What happens if that interest isn't paid?

[Anonymous No.29993405]

>>29992450
That's a fancy way of saying your currency is too big to fail. But let me ax you something anon; what happens when real world inflation far outstrips the central bank given value? Think about it. You get the Weimar Republic, where the banks are pleading with you to accept that a loaf of bread should cost ten marks, at the same time as factory workers are being paid in tens of thousands of marks. That's why unbacked currency is doomed; because the real world and the money printers start to disagree on value

[Anonymous No.29993660]

>>29992450
It's one of those things where if you're in the middle of it, you don't see what's wrong and it seems like a good idea. Then when it's all over and money is useless, you're gonna beat yourself up for not seeing the signs. Yes, it works for now. But like most charades it won't last forever.

[Anonymous No.29994180]

There is not a single country which doesn't use fiat currency.

[Anonymous No.29994264]

>>29993105
Then trust in any sort of business collapses, because any business is based on trust.

>>29993405
Can you give an example of anything except real estate that has been increasing in price for more than 2-3% annually? And real estate prices crash like 20-25% anyways in the US when interest rates are raised

I also on't really get what you mean with the too-big-to-fail idea. I'm not saying that the USD will always be valuable because people will always own USD, rather that there are always going to be people who will owe USD and will have to get some somewhere.

[Anonymous No.29994389]

Don't you people ever wonder whether or not the hyperinflation thing isn't a self-fulfilling prophecy?

[Anonymous No.29994403]

>>29992450
>investing in both crypto and stocks
full retard. Go all in on one or the other. Don’t do both

[Anonymous No.29994519]

>>29994403
Why? I'm currently 60% crypto, 30% stocks and 10% emergency savings. Is this bad?

[Anonymous No.29995638]

>>29994264
And what does a collapse in trust implies for interest rates, and thus the interest paid relative to the US national debt?

[Anonymous No.29995879]

>>29994403
why? crypto is more fun to trade due to volatility and 24/7 uptime, but less fun to speculate with because its scope currently only covers a small portion of bleeding-edge technology

[Anonymous No.29995992]

>>29992450
i'm a swissfag and i've grown up thinking that cash > everything else. maybe i'd look at things differently if i lived in a country with extremely volatile currency like argentina or...germany kek.

[Anonymous No.29996886]

>>29995638
If we're talking just emotional angst: that the US would not be able to take on additional debt/could not expand its money supply anymore. At that point the US gov would have to downsize. This would lead to a recession after which the business cycle would continue as usual.

[Anonymous No.29997356]

>>29995992
I still think it's quite amazing that despite all the skepticism a euro is actually worth more than a swiss franc

[Anonymous No.29997497]

>>29996886
I'm talking about a default, the US not owing to it's debt and thus trust in the dollar itself being shaken, now tell me if you think a default would be nice for anyone holding fiat. In the current scenario there is no problem in holding fiat IF you can earn a good interest on it.

[Anonymous No.29997530]

>>29994264
Thank god we don't use anything that is based on math and proof, otherwise we'd all be slaves.

[Anonymous No.29997784]

>>29992450
>It's backed by debt
Ie nothing, backed by itself, an empty recursive loop
>So why would we get actual hyperinflation?
Because debt is infinite. Just add another zero.
>interest
The real value can be manipulated by adjusting the monetary base and thus the value of the money in which interest is paid.
>>29994264
Literally the entire US and foreign equities market.

[Anonymous No.29997901]

>>29994264
Also
>there are always going to be people who will owe USD and will have to get some somewhere.
This is precisely why it is increasingly less valuable over time and why everything you can buy with it is increasingly more valuable. No one wants cash.

[Anonymous No.29998054]

>>29992450
you're not going to get a straight answer here; for the contrarian USD bull side look at jeff snider, bond bul lacy hunt (though he says fiscal stim can lead to hyperinflation), harry dent - only cause he's entertaining
there's a lot of inflation/ USD bears too, start with Peter Schiff

https://www.investing.com/analysis/sugar-rush-why-the-economy-will-run-hot-then-crash-200564047

there's literally no consensus right now, everyone's running around in the dark.

[Anonymous No.29998261]

>>29998054
>USD bull
How much crack do you need to smoke to long USD?

[Anonymous No.29998472]

>>29992450
the USD is backed by the US military and the USA has the wealthiest tax base to draw from.
China buys all of our bonds because they're a great source of cash flow. they know we will never pay it in full.

fiat is not bad but central banking is a huge problem. the FED printing like crazy along with stagnant wages and 0% interest rates are going to absolutely fuck millions and millions of people in the long run. if you are in a position where you have a decent job, low living expenses, and can buy the next dip (whether it be real estate, stocks, or crypto) consider yourself extremely fortunate.

[Anonymous No.29998564]

>>29992450
In my mind you can save in fiat all you want if you can generate at leat 2-5 percent per year to not lose buying power BUT just for make some other investment the day start your company or something like that you should take the chance dont save that fiat for nothing

[Anonymous No.29999505]

there's at least 2 ways out of this credit bubble and dead real economy which are the true causes of what's been wrong the past 20+ years, ever since greenspan decided to kick the can down the road since 1997;
1) deflation and deleveraging, CB does middling intervention or is ineffective, market wins in the end by popping the bubble. Austerity. People suffer. USD retains its value, it's the existing system but with a proper bust cycle.
2) hyper-drive with fiscal stimulus, USD is rendered worthless. Or default on existing debts like >>29997497
Cause a crisis, offer the solution. Replace USD with a NewUSD; entirely new system. The great reset.

3rd option) is the status quo. liquidity trap, pretty much Japan, 0% interest rates, stagnation even with QE and MMT, ongoing fight against deflation

>>29998261
cause things aren't as simple as they appear and the pleb knowledge that you and I have are not enough. watch his videos. global finance and the real economy are so distorted that things aren't what they seem. many of the underyling problems are caused by a eurodollar shortage.

[Anonymous No.29999854]

>>29997497
But the problem is that as I understand it, the FED does two things

- Just plainly lend newly printed money to commercial banks with interest. No free, unbacked money for the nation here.
- Buy treasury bonds from commercial banks to put money into the economy. The government is obligated to pay the FED an interest. No free, unbacked money for the nation here.

So I can see fiat taking a very big hit if the US government were to default. But it's not the only debt backing the US dollar. So I don't see why the USD would suddenly be worthless.

Losing value =/= becoming worthless.

It's also unlikely the US federal government would ever actually default in my opinion. It would paradoxically seriously harm China's rise if the USD were to become too cheap, for example. Hence why they keep lending money to America.

All in all I feel that what's happening is totally incomparable to the Weimar Republic. The Weimar Republic didn't have a debt backed currency. It had a currency backed by literally nothing to pay back the government's debt. I'd say it's the opposite of what we have today.

Again, feel free to correct me if I'm wrong. I have no formal training in economics/finance.

[Anonymous No.30000325]

>>29999505
I'm an economist

[Anonymous No.30001065]

>>29997784
I think we're discussing separate things. No one claims the USD keeps its value. Central banks publicly state that a value loss of 2%/year is their explicit goal.

I'm not advocating against stores of values like Bitcoin at all. I use them myself. Why wouldn't I? I just think people are overly bearish about the USD

And we had an equities bubble in the 20's when we had the gold standard. That's not inflation. Inflation is about goods you actually directly want to consoom, not goods you buy to be able to consoom more later.

>>29998054
Thanks for the tip, anon. These look like interesting people. Although I don't trust Peter Schiff. He's more of a salesman than an economist imo.

>>29998472
I do consider myself extremely fortunate, but aside from real estate prices no normal costs seem to be increasing more than to 2 to 3% per year. Wages are very stagnant though, I give you that.

>>29998564
Of course. I keep 90% of my wealth invested.

[Anonymous No.30001177]

The dollar won't fail. It's too useful of a weapon.

[Anonymous No.30001282]

>>30000325
that's one of his arguments, the disconnect between the theory at the fed - clasically trained economists, vs what's actually happening in the market.
https://youtu.be/14I1BdncYVo?t=4498

[Anonymous No.30001310]

>>29999505
Damn, fren, this goes way over my head. But thanks, I'm going to research this.

[Anonymous No.30001368]

>>30001065
yep, that's what I think too, he's there to sell gold so of course he builds an inflationary narrative. The problem is I don't have anyone else to point to.

[Anonymous No.30001423]

>>29997356
it used to be 1.75chf in the mid 00's. last year it was around 0.95 and now it's 1.1 again.

[Anonymous No.30001467]

>>30001368
To be completely honest with you I'm kind of salty @ him because he tries to dump my BTC bags. But I'll take a look at his stuff anyways, anon.

[Anonymous No.30001522]

>>29992450
>It's backed by debt.
Gtfo kike