Money Paradox

Money is a tool of exchange, which has very high liquidity and should ideally have an objective value.
Fiat money, do not have objective value. I say we should use a set of elements in this universe as money. The least valuable denominations will be the most prevalent elements and the most valuable denominations will be least prevalent elements. Of course things like chemical & nuclear stability of the element must also be considered. For convinience, certificates representing a predetermined quantity of these elements may also be used.
However fiat money does not have any of this, and was designed because real money suffered from a lose of liquidity and the resulting deflation when people hoarded these elements as savings instead of investing them in productive activities. This happens because people do not behave rationally.
This is why liberals endorse fiat money, which is a good reason. So they have made a scheme which will ideally only print fiat money as interest payments to goverment bonds bought by the people who want to hoard the fiat money. This will result in a small but managable inflation.
But unfortunately, fiat money makers of most nations do not follow the above expectated behavior strictly. Politicians love to magic fiat money into existence and simulate a fake economic boom.
So our species, being the only species capable of production now faces this economic paradox: Real money leads to deflation from irrational savings (a.k.a hoarding) and Fiat money leads to inflation from irrational spending (a.k.a magic money).
We can’t go back to barter system because we will have to sacrifice a lot of liquity in using a common medium of exchange.
There is one solution though: We should educate ourselves to be rational, so that we can go back from fiat money to real money and save us from the dangers of fiat money.

Money is a tool of exchange, which ought to have high liquidity and should ideally have an objective value.

Fiat money, do not have objective value. I say we should use a set of elements in this universe as money. The least valuable denominations will be the most prevalent elements and the most valuable denominations will be least prevalent elements. Of course things like chemical & nuclear stability of the element must also be considered. For convinience, certificates (real or digital) representing a predetermined quantity of these elements may also be used.

However fiat money does not have any of this, and was designed because real money suffered from a lose of liquidity and the resulting deflation when people hoarded these elements as savings instead of investing them in productive activities. This happens because people do not behave rationally.

This is why liberals endorse fiat money, which is a good reason. So they have made a scheme which will ideally only print fiat money as interest payments to goverment bonds bought by the people who want to hoard the fiat money. This will result in a small but managable inflation.

But unfortunately, fiat money makers of most nations do not follow the above expectated behavior strictly. Politicians love to magic fiat money into existence and simulate a fake economic boom or pay for a war.

So our species, being the only species capable of production now faces this economic paradox: Real money leads to deflation from irrational savings (a.k.a hoarding) and Fiat money leads to inflation from irrational spending (a.k.a magic money).

We can’t go back to barter system because we will have to sacrifice a lot of liquity in using a common medium of exchange.

There is one solution though: We should educate ourselves to be rational, so that we can go back from fiat money to real money and save us from the dangers of fiat money.

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