Fiat money has been defined variously as:Any money declared by a government to be legal tender.[2]State-issued money which is neither convertible by law to any other thing, nor fixed in value in terms of any objective standard.[3]Intrinsically valueless money used as money because of government decree.[4]While gold- or silver-backed representative money entails the legal requirement that the bank of issue redeem it in fixed weights of gold or silver, fiat money's value is unrelated to the value of any physical quantity. Even a coin containing valuable metal may be considered fiat currency if its face value is defined by law as different from its market value as metal.[5]
That's why in school they tell us that we have a mixed economy. No where in the world is the market unrestricted. On the topic of the Federal Reserve, I'm not entirely sure I would say that inflation is bad. My best understanding as an average citizen without any kind of degree in economics is that by printing more money they aren't actually creating wealth, they're just redistributing it. Everyone's dollar value shrinks a tiny bit and the Federal Reserve has their own lump of cash. The Fed then loans that money to private banks who can use it to make investments in projects which help run the economy. And if there comes another recession, people will always be able to cash out their money. I'm inclined to believe that the Federal Reserve doesn't use that money for their own salaries. Private banks are another story, but if it's a loan it at least gets paid back. Or at least that would be the hope. Investments aren't always successful.
Quote from: IchEsseKinder on August 01, 2014, 08:57:37 AMInflation is bad. It decreases the value of the dollar and thus reduces what you can buy with it. Yes but there would be more money. Right?
Inflation is bad. It decreases the value of the dollar and thus reduces what you can buy with it.
Quote from: IchEsseKinder on August 01, 2014, 08:57:37 AMInflation is bad. It decreases the value of the dollar and thus reduces what you can buy with it. Yes but there would be more money. Right?Quote from: IchEsseKinder on August 01, 2014, 08:57:37 AMAnd it's not redistributing "wealth" by printing more, it's trying to save their asses and the government's asses.Did you mean that literally or were you just dispersing emotions? The Fed creates more money which decreases everyone else's dollar value and the Fed ends up with a profit. The wealth is redistributed to them.Quote from: IchEsseKinder on August 01, 2014, 08:57:37 AMIn fact a great majority of the money is actually created by PRIVATE banks, not the governmentIs it actually significant that the Fed would contract private banks to print money? The majority of money they create is digital anyway. Or do you mean something else? And more importantly, what exactly makes your video a reliable source?I'm trying not to discuss politics anymore; I'm only here because I'm interested in the functions of Fed.
And it's not redistributing "wealth" by printing more, it's trying to save their asses and the government's asses.
In fact a great majority of the money is actually created by PRIVATE banks, not the government