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More on Fiat Currency -There's a lot you DO NOT UNDERSTAND

A follow up to my Japan articles on deflation and government debt:

I found this blogger, Joe Firestone, that explains rather thoroughly the myths and truths behind fiat currency.

Here’s the link to his Article : Myths, Scares, Lies, and Deadly Innocent Frauds: Part One

Some Key Points:

** “All the deadly innocent frauds (difs) are frauds in light of the changeover of the United States to a fiat money system during the Nixon Administration.”


** “Under a fiat monetary system, money is an accepted medium of exchange only because the government requires it for tax payments.” - Warren Mosler

** “The federal government has no more money at its disposal when the federal budget is in surplus, than when the budget is in deficit. Total federal expense is whatever the federal government chooses it to be.” - Warren Mosler

** “The government is no more able to spend money when there is a trust fund than when no such fund exists. The only financial constraints, under a fiat monetary system, are self imposed.” -Warren Mosler

** “Put simply the Government declares it (Fiat Currency) into existence, in whatever quantity it likes. (It has no boundaries)”

** “Since the Government has an unlimited authority to create its own currency, it is obviously false to say that it is or must be constrained in its spending by its ability either to tax or to borrow.”

** “The Government never can have any solvency problem”

** Why is Obama putting monetary restraints on stimulus? Does he not understand the power of our fiat currency? Does he not want to take on criticism from people who do not understand the power of our fiat currency? Is he being too cautious? Or is it just what is best for our economy?


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