Friends, a current reality is that FIAT money is losing value, we are going to analyze some of the reasons.
Money is no longer backed, a few decades ago no country printed more money than it could back in gold, but the president of the United States Richard Nixon in 1971 changed the rules of the game and began to print inorganic money, basing the value of the dollar on global confidence in the economy of the world's leading power, confidence that made most countries have their reserves in dollars, so that the dollar loses value most countries lose part of their reserves.
Immense amounts of debt, it is crazy that the nations of the planet accumulate trillions of dollars in debt but, who is owed? Every time governments ask central banks, debt is generated, the COVID-19 crisis caused GDP to fall drastically, so countries went to borrow more, no country seems to have a plan to avoid debt so, Who is going to pay all that debt?
The only thing they know how to do is print money, in 2020 22% of all dollars in circulation were printed and in 2021 the federal reserve of the United States is about to print 1.9 trillion dollars out of nowhere, when this money is in circulation it will bring devaluation due to the excessive supply of dollars.
Governments give away money, millions of people receive money directly to their bank accounts or by mail, just for being citizens of these nations, especially in the United States, but governments are only looking to make time with this initiative. There is no way to give away money without waiting for an inflation blow. Governments are trying to buy time to solve the economic crisis.
Negative interest rate, when you receive an amount of money less than what you deposited, for account maintenance, if you deposit money in January and you are going to withdraw it in December, you have less money, the interest rate is too low to save money.
Investment in overpriced assets, people want to reproduce their capital by making investments in the stock market or real estate, so the market inflates that is why houses are worth more today than 5 years ago despite being the same house.
These are some reasons why the FIAT loses value, I think the solution is cryptocurrencies, I think they could bring balance to the world economy, but we leave this analysis here, I hope to do a second part.
Thank's for read
Hi @ramsesuchiha
I live in the middle east, and my local currency has already lost more than 90% of its value over the past few years.
Sooner or later, I believe that the same will happen with all Fiat currencies including USD. That's why I'm here in crypto :)
Thank you for sharing your thoughts.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
your experience is important, we must prepare, thanks for reading
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Hello friend @ramsesuchiha
Good arguments, and this situation where fiat money loses value occurs with greater voracity in countries with political problems, a clear example of this is the serious economic and financial situation in Venezuela, where the value of its fiat currency is relatively nil, returning to the subject no doubt Richard Nixon was the architect who aggravated the loss of value of traditional currencies, mainly the dollar. Good post.
Best regards.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
the case of venezuela is very sad friend, thank's for read and comment
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
@ramsesuchiha The biggest reason for the devaluation of the fiat currency is that people consider it gold and save it. As long as the currency continues to circulate in the market, its value never decreases. Similarly, if the policy of dumping in cryptocurrency is abolished, its value will never decrease.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
you are very right, thanks for that part and thanks for reading
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Hello friend, excellent summary, I agree, more and more Fiat money is worth less and less, but I doubt it will disappear, we simply must take our precautions and invest in another type of currency. Fortunately we have other options. Greetings!
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
investment is the solution, thank's for read
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
We all know fait is losing its value nit because of crypto currency it's about slowdown and excess printing we can see a huge depression ahead we need to keep our money safe for the future.
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
I think that great depression is invitable, cryptocurrencies will save us thanks for reading
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Dear @ramsesuchiha
Finally I found some time to catch up with Steemit :) Interesting choice of topic.
I'm myself fascinated with topics related to economy so I found this subject to be very interesting. And I would like to ask you a question: wouldn't you think that in current days most FIAT currencies are holding some value mostly on the principle of faith and trust?
My impression is, that if trust towards FIAT currencies would shaken, then there is nothing that could stop monetary system from collapsing.
Noone ever will. Debts are not there to be paid. That's how things are. All FIAT money in the world wouldn't be enough to pay off all debts. There is just not enough money to do that.
It seem that debts can only be erased with hyperinflation :/
Have a great and lazy sunday :)
Yours, Piotr
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Hi dear buddy @crypto.piotr
That confidence little by little turns in favor of cryptocurrencies, Elon Musk and their purchase of BTC is an example of this, when the general public begins to exchange FIAT money for cryptocurrency there will be a large devaluation
WOW friend that analysis so great, honestly I had not thought about it but you are absolutely right, we cannot pay the debt we simply never can,hyperinflation is the answer, that scares.
Thank you dear angel, I hope you also have an excellent weekend
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit