Martin Wolf, FT commentator, derides as absurd gold replacing the fiat currency standard. We certainly live in strange times when the pick of so-called intellectual thinkers in the west considers gold, a currency with stable intrinsic value that has stood the test of time over centuries, unsound in favour of valueless fiat currencies, which are propped up by little more than the confidence one has in the governments that print and issue them.
Indeed, to appreciate the absurdity of fiat currencies need look no further then Zimbabwe today: Zimbabwe inflation hits 231 million per cent
What’s more Zimbabwe is not an isolated example – there have been plenty of other fiat currency crashes: the Thai Bhat together with many other fiat currencies in the 1997/98 South East Asian crisis; the collapse of the Russian Ruble in 1998; Argentine Peso in 2001; Pound Sterling in 1992 etc.
What’s even more absurd is the idea that in the age of global finance with hundreds of millions in flight capital moving between financial centres with the ‘click of a mouse’ there will not be future fiat currency collapses or that such collapses may be averted by policymakers adjusting interest rates however loosely defined.
It their attempts to prolong the life of a fundamentally flawed capitalist financial model commentators like Martin Wolf have either lost sight of the obvious or are just deluded.
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