No doubt, all great ideas flourish by expanding upon the works of others. Unfortunately, so do terrible ones. And one of the worst ideas in history that continues to play out today is the grand experiment of fiat money.
The idea is simple. Rather than allowing money to be scarce and have intrinsic value, our fiat system grants power to a tiny elite to conjure money out of thin air. Presumably, if the ones in control are smart, honest guys, then everything should be fine.
Fiat was a total failure right from the beginning. When unbacked paper currency was originally introduced in the 11th century by Emperor Renzong of the S’ung dynasty, nasty inflation quickly followed.
It borders on the absurd… as if it were all written as part of a satire. Yet in one of the most intellectually dishonest statements ever made, Paul Krugman recently wrote that “Keynesians have been right about everything.”
This is incredibly dangerous thinking. And it’s important to never forget that, despite how normal things may ‘feel’ on the surface, the economic engines deep below are steered by these same people who worship at the cult of bad ideas.