“Fiat” Money!

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The political intervention on the monetary sistem had dramatical consequences in terms of price stability. The monopolization of monetary issuance and the ban of commodity money provided the states with the possibility to trigger worldwide devastating inflationary processes. Monetary issuance is very easily produced because printing paper money implies zero costs! Printing money became a common form of taxation, instead of the normal collection of taxes. Redistribution through inflation took, to a great extent, the place of redistribution through taxation. And the main beneficiaries of this new system are the bankers, because the monetary policy – i.e. inflation – is carried out through them. The banks act as an interface between citizens (the currency users) and the state (the currency producer). This redistribution also (even though some will say – in the first place) works in favour of the banks, which can be saved from any crisis at the expense of the taxpayer, without him feeling the real burden. So, there’s no wonder that the degeneration of the monetary system came along with the worsening of the financial crisis.

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