Will we see the end of fiat money during the 2030s?
The 2030s is the theme of the latest issue of Deutsche Bank’s Konzept. Konzept’s authors are simply trying to predict what is going to happen in the 2030s.
In the very first article, “The End of Fiat Money?”, Jim Reid discusses whether fiat money will survive the 2030s:
We have lived in an era of fiat money since the early 1970s. Since then virtually all money in existence has only had a value based on trust and, in particular, trust in governments’ ability to maintain its value. Prior to this period, most of the money in existence through history was backed by a commodity - usually a precious metal like gold or silver. When money broke loose from such an arrangement inflation tended to increase (often dramatically), and when money returned to inflation was becalmed. We think fiat money systems should be inherently unstable and prone to high inflation all other things being equal. Politically it is always too tempting to make money when nothing is backing it.
Reid goes on to explain why he believes that the 2030s could very well mean the end of fiat money. The article is, therefore, worth reading in its entirety.
What do you think? Is Jim Reid right? Will we see the end of fiat money during the 2030s?
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