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... for them', because they have to pay tax liabilities.

That is, the backing is not the tax receipts collected, which determine how much of the money created by spending is then immediately destroyed versus how much is added to the supply of fiat currency ...

... but the tax liabilities that give households and businesses an urgent need to be able to make payments in fiat currency.

But as we see in countries where monetary systems melt down into hyperinflation, that is just the kernel of demand for fiat currency ... when a currency loses its ability to function as a store of value, and becomes a means of exchange and nothing more, it no longer functions as a full fledged money.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Sun Oct 26th, 2008 at 03:54:10 PM EST
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