Monday, July 21, 2008

Ron Paul's Texas Straight Talk ~ Faith-Based Currency

The Latin term “fiat” roughly translates to “there shall be”. When we refer to fiat money, we are referring to money that exists because the government declares it into existence. It is not based on production or earnings, and not backed by any commodity. It is solely based on trusting the government. Fiat money is exchanged in the economy as long as there is faith in the government that issues it.

from Ron Paul's Faith-Based Currency


Jonathan Dec said...

You are exactly right. We can thank Nixon for that. Every year since 1971 we've seen devaluation of our dollar... because it's fiat. Amazingly, today, all of the major currencies in the world are fiat.

What our economy is going through is not anything new, ever since 407 AD, when the first hyper-inflation occurred, there's been a "currency wave" pendulum that swings from quality money to quantity currency, and finally back to quality money. We're in the "quantity currency" phase right now because the dollar is fiat. The government doesn't seem to understand the difference between currency and money.

I'm impressed by that article.

Esther said...

Jonathan, I'm glad you see it. R.J. Rushdoony in Roots of Reconstruction p. 656 states: some very devout ministers have taken exception to my emphasis on economics and the gold standard; they feel I should be preaching the "gospel" instead...I am declaring the good news that God is alive and governs not only the church but the state, school, science, economics, agriculture, art, and every other sphere. Our modern economics is the death-of-God economics; it denies that God exists and governs the sphere of economics by His law.