Our Monetary System is Flawed Beyond Repair

Inflation isn’t going down as fast as it should be.

Price rises continue to rise.

The cost of living is getting out of hand.

This is the problem with fiat currency…

What is Fiat Currency?

Fiat currency means government issued currency that isn’t backed by a commodity, like Gold.

It means legal tender.

Dollars, Pounds, Euros, are all examples of fiat currencies.

Fiat currency has been around for hundreds of years, and has evolved in many ways to what we all use today.

We live in a time where the vast majority of money is something we don’t even see. It’s all electronic.

Fiat currency has been used for a long time. But, it hasn’t been around forever, and the current system has several flaws…

The problem with fiat currency is simple.

Today’s monetary system has been in this form since the abolishment of The Gold Standard in the early 1970’s.

Since then, governments & central banks have had control over the supply of currency.

Due to the economics behind it, it’s designed to benefit the richest 1%.

This is whilst ensuring the other 99% lose out to inflation, after being told to “save their money”.

The problem lies within a lack of education. Something that FiRev is dedicated to solving.

The Gold Standard

The Gold Standard was introduced centuries ago as a way of controlling the supply of a currency.

The supply of the US Dollar, for example, was correlated to the supply of gold. You could exchange cash for gold at a fixed rate.

The reason for this?

To protect the value of any given currency.

It ensured that supply wasn’t increasing exponentially, & inflation was moderate.

But, WWI marked the beginning of the end for The Gold Standard. This was due to the need for increasing military expenditure.

The demand for money was far exceeding the supply of money.

Governments & central banks needed more control of the supply of money.

So, they began to abandon The Gold Standard in the 1910’s.

Some countries reintroduced it after the War, including the UK from 1925–1931. But, it fell apart again during The Great Depression.

After WWII, the Bretton Woods System, was in operation until 1971. This involved fixing the dollar to gold, whilst other currencies fixed to the dollar.

Despite this, the early 1970’s saw the complete abolishment of The Gold Standard.

Governments & central banks have been in complete control ever since.

The monetary system is designed to decrease in value, as supply increases.

The COVID pandemic is a perfect example of this.

Many economists have been calling for the return of The Gold Standard for years.

Most notably, Peter Schiff.

At the height of the pandemic, central banks printed money at will. This was to pay for the costs that arose, such as stimulus payments & PPE.

Whilst we expected a recession, we managed to avoid it.

But instead, double digit inflation led millions into a cost-of-living crisis.

This is the problem with fiat currency.

Those in control, are operating in favour of the interests of the few, as opposed to the needs of the many.

Inflation refers to the increased prices of consumer goods.

• Houses.

• Groceries.

• Fuel.

• Energy.

And more.

• Those who own assets will benefit. Their assets are generating more income & appreciating in value.

• Those who own cash will lose out due to the decreasing purchasing power of fiat currency.

This is the sole reason the gap between the rich & poor is the highest it’s ever been, and it will only continue to get bigger…

The Root of the Problem

The root of the problem doesn’t come from the currency itself, but rather the lack of education on what money is…

I get an email every month from my bank.

I don’t read them, but the title always says something like “It’s time to get saving”.

I always chuckle a little.

I’m fortunate enough to understand that cash isn’t for storing wealth.

It’s to act as a medium of exchange for goods and services.

That’s it.

The term currency comes from the word current.

Take an electrical current, for example, and how you need a complete circuit to get electricity.

If your money sits still, it’s not being used in the way you’re meant to use it.

I’m all about giving you the education necessary to improve your life.

Having money in the bank isn’t a problem.

Of course, we all need money for bills, expenses, and some kind of backup/emergency fund.

But when it comes to storing wealth for the long term, the last place you want to look at is fiat currency.

Stocks, index funds, real estate etc. are all good options if you have a long term outlook.

I’m a sucker for a good quote, and this is a personal favourite of mine…

“Formal education will make you a living. Self education will make you a fortune.”

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