What is "fiat" money?

In this video I explain what the term "fiat" money is and how our government doesn't have to borrow its own fiat in order to spend.

Category:

News & Politics

Tags:

• Mike Norman
• fiat currency
• dollar
• MMT

[hrmIwonder]

@christo930 - Inflationg isn't the reason we need 2 incomes now. When you spend money, that becomes someone else's income and your income is your employer's expense. Income=spending, spending=income. The reason we need 2 incomes is that more and more of the national income is going to the top 1/10 of 1%, because they've bought the govt. The economy has grown while wages have stayed flat for 30 years.

[ltmikepowell]

@hottenma I though Federal Reserves is a private bank that owned by private stock holders, which JP Morgan Chase and Rockefeller family is the largest of all. Although the Rothschild do involved in Federal Reserves System.

[ltmikepowell]

@dfg93353 Simple, return to the Greenbacks system which President Lincoln once issued.

[christo930]

@hottenma How can the Saudi's lower oil prices when they produce 8mb/d and the world market is about 87mb/d? Who, exactly, is going to regulate oil speculation, given that oil is a global commodity? As of right now, there simply isn't a viable option for replacing oil.

[christo930]

@hottenma ALL US dollars are loaned into existence, if you don't believe that, you need to go look it up. As for the Saudis, they no longer have the excess capacity to be the swing producer, furthermore, OPEC is responsible for about 40% of the world's oil production. Lowering the price of oil would be devastating to the oil industry and hundreds of projects would have to be shut down because they aren't profitable at much lower prices.

[hottenma]

@christo930 getting an energy alt., getting off oil, regulating oil speculations properly, and demanding the Saudis lower prices across the boards as the global price setter will bring down those prices and it will thereby "lower all boats" in the economy since all things in the economy are effected by the price of oil. It's just that simple.

[hottenma]

@christo930 yes I know. But the price of oil is not related to the US dollar or the Fed. It's related to the Saudis as the swing producer & monopoly price setter in oil production world-wide (and no energy alts). They set the price & let quantity adjust. See Warren Mosler's site for more on how all that works. It's got zero to do w/ the Fed's charter, our fiat currency, & the US dollar.

The US dollar isn't "loaned into existence" anymore than humans are "loaned" their next breath.

[christo930]

@hottenma The price of oil was about $2 since 1969 and is about $100 right now. Literally everything has gone up in price, there has been inflation in pretty much every single year since 1969. This is why we need 2 incomes when 1 would do just fine in 69 and this is why we have to subject our savings to risk to keep the inflation monster from eating our money. Do you at least have a guess as to why the US dollar needs to be loaned into existence?

[hottenma]

@christo930 all you said is correct. That divie needs to STOP asap imho & MMT would agree. There is just no point in that. The fact that they cannot sell the shares & they cannot be used for collateral doesn't make it a real corporation like everyone wants to tout. It's a government entity w/ an f-d up charter that let's rich banks profit on it (they don't own it...they just profit on it). It needs to stop NOW. But that change is minor (aka no need to "end the Fed").

[hottenma]

@christo930 a car in 1969 doesn't offer half the amenities a car today offers. The US dollar has not dropped that much anyway. In fact in the early 2000's the US dollar was at the same spot it was in '69. Yes houses are over-priced. There was a housing bubble thanks to excess lending and a buying crazes.

Inflation can definitely hurt an economy but these days we have deflationary concerns not inflation. Economies work best with price stability and full employment.