Fiat Currency Debasement

Global debasement of fiat currencies means steadily rising gold, silver, and BTC continue to rise despite stalling recovery.

Continuing monetary stimulus and suppressed rates mean less confidence fiat currencies will return to past glory.

Von Mises (1966):

“Economics recommends neither inflationary nor deflationary policy. It does not urge the governments to tamper with the market’s choice of a medium of exchange. It establishes only the following truths:

  1. By committing itself to an inflationary or deflationary policy a government does not promote the public welfare, the commonweal, or the interests of the whole nation. It merely favors one or several groups of the population at the expense of other groups.
  2. It is impossible to know in advance which group will be favored by a definite inflationary or deflationary measure and to what extent. These effects depend on the whole complex of the market data involved. They also depend largely on the speed of the inflationary or deflationary movements and may be completely reversed with the progress of these movements.
  3. At any rate, a monetary expansion results in misinvestment of capital and overconsumption. It leaves the nation as a whole poorer, not richer. These problems are dealt with in Chapter 20.
  4. Continued inflation must finally end in the crack-up boom, the complete breakdown of the currency system.
  5. Deflationary policy is costly for the treasury and unpopular with the masses. But inflationary policy is a boon for the treasury and very popular with the ignorant. Practically, the danger of deflation is but slight and the danger of inflation tremendous.”

Von Mises, L. (1966). Human action: A treatise on economics.

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