Why are most people ignorant of how fiat currency and central banking works?

[bingbongbangbung]

Or they are aware but pretend to be ignorant to give such a rigged economic system more legitimacy? With fiat, the government and banks can just keep on printing money indefinitely out of thin air. Yes that causes inflation (in theory), but since such a currency is built on faith rather than commodities, they can easily introduce deflation through another subjective concept. I heavily suspect once automation is cheap and viable enough, then magically everything is gonna get much cheaper.

Also when a government owes itself money, nothing is gonna happen to them (unless through a revolution) because who's gonna come after the freaking government to pay it back? Central banking pretty much allows bankers to collude and implement whatever they want, at the expense of everybody else. Yes I'm aware there's legal limits to what they can and cannot do, but you really think they can't just get lawyers and lobbyists to exploit loopholes and change the laws?

[jamesgoldman]

Because they are fool's

I'm in trade and I collect both gold and silver

My quarter Panda ring cost me £500, 9 years ago
One of my dealers said I'd never get a return on that
I love reminding him now it's scrap value is £800

[bingbongbangbung]

Those dealers lie so they can get it from naive customers, only for them to resell it at a higher value

[jamesgoldman]

He's not a gold buyer but an antique dealer

[DrPepper12]

They didn't pay attention in high school economics. Now they're just worked to death so they don't have time or energy to question they're inescapable capitalist predicament.

[bingbongbangbung]

Well central banking (to an extent) existed when feudalism was around, and fiat currency has been implemented in both capitalist and socialist economies; iirc the Soviet Union actually adopted fiat decades before America ever did

[Syntosi]

It sounds to me that you are one of the people who does not understand how fiat currency nor central banking works. First of all, take any ideas of going back to a commodity money and throw it in the trash. We are not going back to the gold standard and you would not want that either. That system is objectively inferior to the one we have today.

Fiat currencies works based on trust. In this case, trust in the government that issues it. Sure, they have the power to fuck things up by hyper inflating the value or whatever but that is where the word "trust" comes into the equation again. Just because you dont trust your government does not mean others shares your beliefs, objectively speaking developed nations are trusted very highly in regards to their monetary integrity.

As for central banking, its a system that has functioned pretty well. Its obviously not perfect, nothing is, but its doing its job as well as can be expected. I am far more concerned about private banks than central banks.

[bingbongbangbung]

Spoiler alert: all currencies are based on societal trust

[Syntosi]

Its not. For example commodity currencies are based on the value of the commodity which can be independent on social trust.

[bingbongbangbung]

Except said commodity is only used as a currency based on trust, even if said commodity has intrinsic value going beyond being used as currency

[bingbongbangbung]

Or do you not understand the basic concept of how money itself works

[Syntosi]

... You do understand the difference between currency and bartering right?

[bingbongbangbung]

You do understand currency is a physical medium of the exchange of goods and services, which is basically an offshoot/successor of bartering right, and that when shit metaphorically hits the fan becomes worthless right?

[bingbongbangbung]

Omfg I wrote "right" twice; this is why I prefer SimilarWorlds over GaG... I can do way more stuff like edit comments

[Syntosi]

One can come from the other without them being very much alike, especially in this specific aspect.

Money does not inherently have its own value. It can do, if its backed by a commodity such as gold coins being made from gold so even if the value of that currency is destroyed then the gold itself still has value. But the concept of money does not have inherent value and only serve as a medium for exchange. You exchange a commodity or service of value in exchange for a currency which functions as a medium for a future exchange where you can transfer your currency back in exchange for some other commodity or service.

So, if shit metaphorically hits the fan then the other party might no longer accept a currency for trade because they do not believe in the value of that as a medium. Bartering however does not have that problem. A commodity or a service will always have a value. The value might change according to supply and demand but they will not become truly worthless even in an apocalyptic scenario.

Basically, I dont need social trust to know that the value of a potato (medium of trade) is equal to the value of a potato (commodity or service I barter for).

[lightbulb27]

It is not taught in USA at all, in fact they get almost no education. maybe only taught in some colleges.

I learned it on my own later in life.

[bingbongbangbung]

Is it true that most Americans can graduate highschool without even having basic literacy skills

[lightbulb27]

that I don't know for sure.. the ones I see, the kids are doing well. Some schools, can be a mess. take this one as an example: 23% literacy level...

www.usnews.com/.../bridgeport-school-district-103721

this isn't the school, it's the parents failing the kids. the schools will just keep passing kids along til they exit school.

[beefcakebradybatson]

They aren't taught economics in school.