Talk:Fiat money/Archive 1

message: The definition at  sounds a little different...
:yes, but the word "ficuciary' carries a lot of weight.  These definitions at xrefer are strictly from neoclassical theory, they are not balanced for the Marxist or green view, which requires more investigation of the assumptions... for instance the term ficuciary.  That said, it doesn't hurt to wrok off the neoclassicl definitions, since they're exact.  That said, this article has a problem, which is that "fiat money" is really a loaded term.  We should talk about backing and clearing, not about "types of money" if we want to be general.    See political economy for a list of the issues - the neoclassical phrases are chosen to be useful in game theory etc.... not what the other branches care about. --24 (signature appended by Magnus Manske)
::I think it would be best if the article here would start with something like the "neoclassical theory" definition, then have the Marxist/green view (labeled as such!). 
:::that's exactly what I just did to political economy which drastically improved it...
::When I read the beginning of the current article, I instantly get the impression "this is something bad!". 
:::has style problems - serios ones...
::And that's something that, IMHO, should never happen in an encyclopedia article! It should say "fiat money is..." without assigning any value, subtle or not. 
:::unfortunately, this is the single most contentious topic in economics.  I have literally heard hundreds of hours of crap from people about what fiat money is and isn't.  Basically, even saying it exists is assigning a value.  Neutrality is near impossible.  
::Then, it can say "it is considered by... to be...", open and clearly labeled as an opinion. IMHO, the topics you choose to write about are not in question, and neither is most of the contents, but the way it is presented. I am sure we can work on the form. --Magnus Manske, Tuesday, April 9, 2002
:::thanks.  Yes, in general, the rewrites have been improvements, and they tend to come when someone says 'what's this crap?' and gets attitude about it, finds the missing material, and then it all gets worked in together.  Others in need of a form rewrite might be moral purchasing, intellectual capital, human capital, commodity markets, green economists, anti-globalization movement.  These are the rest of the most contentious topics in economics...
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The last paragraph says something like 'Between the end of World War II, ...' - that doesn't make sense, there should be two times for a 'between' statement. I had a quick look at the US dollar article to see if I could fill in the gap, but it's not clear to me what the period in question actually is. Can someone else fix it please? - S
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The article leaves an impression that the gold standard was a kind of widespread historical standard without qualification other than that the silver standard was an alternative.  In fact, the gold standard only became widespread quite recently, due to widespread western wealth.  When societies were poor, the standard was whatever people could afford.  Thus the usage of lesser metals like silver (the British pound was original a pound weight of sterling silver, thus Pound Sterling) or copper (Roman sestercii), or even non-metals.
Will someone correct it, or should I?
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Is Ultra-conservative the right word to use in describing those who support the gold standard?  I know that is an accurate description, but since conservative has formed a destint political meaning and most of those who oppose fiat currency are Libertarians should we develop a better term? --Miked84 22:20, 14 December 2005 (UTC)
thread_title: Old [[Talk:Fiat currency]]

message: Fiat Money = What your government forces you to pay as payment in taxes. You can't pay taxes to the government with Non Fiat Money. Both the Gold and Silver advocates and the Fiat Money advocates are incorrect and wrong.
The truth and fact is there is a cause and effect as to what a nation uses as money at the beginning of the money laws.
Sounds like a point of view and bad formatting to boot. Tinus 22:11, 24 December 2005 (UTC)
thread_title:  Strange wording 

message: This article says fiat money is money with no intrinsic value, rather than money that is declared by the government to have value.
:Unlike what Wikipedia says on the subject, the essence of fiat money is not that it is money declared by a government to be legal tender.  It need not derive its value from the government demanding it in payment of taxes or insisting it should be accepted within the national jurisdiction in settlement of debt. Instead the defining property of fiat money is that it has no intrinsic value and derives any value it has only from the shared belief by a sufficient number of economic actors that it has that value.
If true, that would be a change to the very top section of this article, at least.
dfrankow (talk) 20:23, 26 November 2009 (UTC)
replies: text: As already noted here, a blog post is not a reliable source.  The current lead sentence 'Fiat money is money declared by a government to be legal tender' is sourced to the 1907 publication Money and Investments.  We can replace the current definition when we have an alternative reliable, published source. - Crosbiesmith (talk) 19:15, 27 November 2009 (UTC)
replies: text: As stated below, I have added Keynes's definition to the top section of the article. - Crosbiesmith (talk) 16:09, 29 December 2009 (UTC)
thread_title:  Fiat money is not government-declared? 

message: In general, the Wikipedia articles (gold standard, fiat currency, related ones) need to attribute beliefs to the relevant economic schools of thought.  Many of the statements in the current articles appear to be statements of faith, not fact, and they don't, in general, acknowledge which school of thought they are from.   This BIG problem kind of overwhelms a lot of the little problems.
This article is one of the most biased, propaganda-filled articles on Wikipedia, and should probably be completely re-written. It is full of arguments and rhetorical questions, rather than a simple statement of facts and information. One would hope that the article presents different viewpoints equally, instead of one viewpoint, the opposing viewpoint, and then why the opposing viewpoint is wrong. Information on this articleis controlled by people who feel strongly about one position on the subject, and they are the only ones who bother to write and edit the article. In short: this article is what's wrong with Wikipedia.
:Yes, this article is FULL of propaganda. It's pretty disturbing... Someone needs to overhaul this... ask123 (talk) 19:51, 26 March 2008 (UTC)
replies: text: Agreed.  At its worst, Wikipedia serves as just one more place to entrench ideas that "everybody knows" but that no one can source to any satisfactory degree.  A good example is the statement that the historical norm has been the use of commodity-backed currencies.  This should be sourced to a history book or history paper but instead is sourced to a person named Nick Jones who wrote an article about how in his opinion fiat currency is a sham.  RaulGroom (talk) 21:57, 3 September 2009 (UTC)
replies: text: It appears the Nick Jones article is used only as a source for the last sentence of the paragraph, making the remainder of the paragraph unsourced.  I will tag it as such. - Crosbiesmith (talk) 11:13, 6 September 2009 (UTC)
thread_title:  Start again? 

message: I have several problems with this article but let's just start with the first sentence:
:Fiat currency or fiat money, is money that is current or legal tender as satisfaction for money debts simply and only by government fiat i.e. by arbitrary order or decree, by nothing more than law.
# To define currency in terms of the word "current" is reflexive and therefore not helpful.  
# Not all forms of a fiat money are legal tender.  Legal tender refers to the lawful (i.e. legal) forms of payment (the meaning of the word "tender") in a particular currency.  What constitutes legal tender depends upon (a) the currency, (b) the jurisdiction, (c) what the payment is for, and (d) the amount of the payment.  In some jurisdictions only certain coins of a currency are legal tender for that currency, in others only the bank notes, etc etc.  Not more than a small number of coins can be used in some places, for some things.  So the term "legal tender" is used incorrectly here.
# Again and again in WP we find the assertion that all debts can be satisfied by the payment of "legal tender".  No.    Legal tender is simply a form of a currency which MUST be accepted in discharge of a debt denominated in that same currency.  If I owe pounds sterling I cannot legally tender (see where the term comes from?) US dollars.  And vice versa.
OK.  I'll stop there, for now.  Paul Beardsell 04:15, 6 January 2006 (UTC)
replies: text:  I agree with all your points. Fiat Currency is merely currency that is created by a government and is accepted in a community as money proper. The reason for the acceptance may vary from coercion, prohibition of alternatives, superior stability or some other form of superior utility. Fiat Currency is characterised by the fact that it is not redeemable for anything (ie it is not a promisory note). As such it is one form of money proper (there are other forms such as commodity money) and it is not merely a credit substitute. Terjepetersen 10:15, 7 January 2006 (UTC)
thread_title:  Bad start 

message: I find this statement deceiving:
"One recent example was the Argentine bust which followed the unravelling of its “currency board”. Instead of being linked to gold, the peso was linked to the U.S. dollar, which served as the hard money basis. When an economic crisis hit, dollar reserves fled the country, causing the monetary basis to collapse."
How can "dollar reserves flee the country", I think what must have happened is that they were spent.  This hardly seems like a problem with the monetary system, but rather simply a reflection of a collapsed economy.  If you spend all the money, you've spent all the money!  In effect, wouldn't this be a testament to the success of the system, the government was not able to pretend that they hadn't spent all by simply printing more money, ensuring that the money did not inflate?
___________________________________________
Answer to "How can dollar reserves flee the country?"
If a central bank (in this case, Argentina) stands to exchange 1 - 1 with the US dollar, they issue pesos and hold dollars in reserve (to "Back" their currency).
If someone with a lot of pesos doesn't believe that the central bank has enough dollars to back their currency, or believe that the peso is overvalued (which is the same thing) they can engaged in a speculative attack.  Basically, they sell pesos to the central bank and receive dollars.  This drains the reserves in the central bank and often causes a devaluation in the currency.  —Preceding unsigned comment added by 74.232.140.88 (talk) 03:21, 14 February 2008 (UTC)
thread_title:  Bad example 

message: "A further illustration of the irrelevance of physical convertibility can be seen by supposing that a bank issues two kinds of paper dollars: one redeemable for one ounce of silver throughout the year and another redeemable for the same amount of silver, but only at the end of a year. If the market interest rate is 5%, and if it is costless to issue paper dollars, then the inconvertible dollar must start the year worth about .95 ounces, rise to about .97 ounces at mid-year, and finish the year worth exactly 1 ounce. Any other values would result in arbitrage opportunities. For example, if the inconvertible dollar started the year worth .96 ounces, then each time the bank received .96 ounces of silver in exchange for a newly-issued dollar, it could lend the .96 ounces at 5% interest, be repaid 1.01 ounces at year-end, pay off the paper dollar with 1 ounce, and earn a free lunch of .01 ounces.
What is the value of the convertible dollar? A little reflection will convince the reader that it too must start the year at .95 ounces, reach .97 ounces at mid-year, and finish the year at exactly 1 ounce. That is, the issuing bank must actually raise the amount of silver it will pay for a dollar over the course of the year, or arbitrage opportunities will result. For example, suppose that at the start of the year, customers can deposit .95 ounces and get one paper dollar in exchange — a physically convertible dollar that can be returned to the bank for .95 ounces if the customer desires. If that dollar remained at .95 ounces over the whole year, then at the end of the year the bank will have received a free lunch of .05 ounces — a free lunch that will attract rival bankers willing to pay 5% interest to the holders of their dollars."
How can any logic be derived from this example without specifying how the notes are issued to start with?  They don't just get issued, they get sold, but at what price?  How much silver is paid for these two notes to start with?  Obviously at the begining of the year, one would pay the bank a full ounce for the note that is convertible (back to 1 ounce), but only .95 ounces for the one that wasn't!  This example is therefore bogus.
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I agree, I am going to remove those two paragraphs as it is more confusing (and erroneous I believe) than it is informative over what I see is something quite simple. A physically convertible currency is affected by the interest rate of the specie or commodity that is backing it. And by the way, no one knows what the actual interest rate for anything will be for the year. That would be the same thing as predicting the future. Also, a 5% interest rate would not increase 0.95 to 1; it would increase to 0.9975. 5% interest would raise 1 to 1.05.--Acefox 00:10, 25 November 2006 (UTC)
thread_title:  OK, this example is meaningless 

message: I've wondered for a long time why people are willing to accept a currency that is not physically convertible. And "financially convertible" sounds to me too much like "bootstrapping", which is worrysome to me as a mathematician.
So I recently discovered some important fact of the media / ad industry, namely that adverts  often promote something other than the owner of the relevant trademark. For example, shop owners will seldom put up a sign saying "Ice cold softdrinks available here". Instead they'd rather put up a "Coca-cola" sign, giving "Coca-cola" free media exposure.
Now many ads include prices e.g. "Coca-cola now only $1". Therefore currencies gets free media exposure almost everywhere you look. My guess is that this media exposure is of the order of a hundred of billion of dollars every year (based on global adspend). This means that the dollar is the largest brand to ever exist. It also means the brand equity of the dollar rivals the value of the gold backing the dollar.
I'm sure someone figured all this out before me, but why does the article not mention any of this ? -- Nic Roets 13:49, 6 August 2006 (UTC)
replies: text: To elaborate : Paper carrying the signature of the central bank president trade at a premium to a blank piece of paper, just like an official FIFA soccer ball will command a premium over an unbranded soccer ball. -- Nic Roets 19:28, 10 August 2006 (UTC)
replies: text: If the idea has indeed been mulled over before than it should appear in some economic journal or newspaper somewhere. Find the citation, and, then, it can be included. However, until then, it's just your theory, and personal speculation does not merit inclusion on Wikipedia. I'm not disparaging your idea. Your numbers and idea may very well be correct. It's certainly conceivable. But, still, we'd have to take your word for it. And that doesn't cut it on this site. Basically, the idea must be based on more than your personal speculation or insight that has no reference or backing to prove it. Your idea may make sense and work out mathematically but still not be true so far as the way fiat currency has actually developed in reality. (i.e. you could be putting 2 and 2 together to get 4, but, as it turns out, it wasn't a math problem.) If you could add your personal thoughts on a topic to any Wikipedia article, imagine all of the original research (aka misleading/false info) that would appear in Wikipedia articles...oh wait, there already is unverified, unsourced original research on Wikipedia... ask123 (talk) 19:59, 2 January 2009 (UTC)
thread_title:  Currency as a brand 

message: The article as a whole, and this section in particular, is massively short of citation and attribution. This section reads like a debate between opposing contributors and is a synthesis of their views. (The SYN tag usually applies to an editor drawing his own inferences from cited material. Since no citations have been provided, one could argue that it is not the best tag, but it is better than NPOV). Frankly I'm astonished that this article was awarded GA. --John Maynard Friedman 16:55, 15 August 2007 (UTC)
replies: text: The worse problem is not lack of citations, but the fact that this section is mostly irrelevent to the article. We need a discussion of the difference between fiat money and credit money (which is given in the previous section). Basically credit money is the type issued by banks (as banknotes), and fiat money is where a governent backs the notes of a bunch of national central banks, insures their debt with the additional power of the government to collect taxes from the population by force, and declares it will accept these notes as payments of debts to the government, and all its citizens are required to do this also.  However, the next section which follows is a bunch of Marxist and anti-Marxist rants about whether or not this extra layer of government guarantee is a good thing or not (Marxists, who love government, apparently think it is). But whether these things are "good" or not, or even most of the debate about whether they are "good" is outside the scope of this article. Summarize shortly and put it in the article on Marxist economic theory, or something. We don't need the whole debate. The types of money are what they are, and nothing but a pointer needs to go to other article(s) debating on the utility or "trueness" or helpfulness or goodness of each of them.  [And by the way, if credit money is a giant hoax perpetrated by capitalists, then show me the Marxist or Communist State which isn't glad to get credit from the rest of the world. If they can't get it, and their fiat money is worthless (see Cuba) it's only because they have tended to be theives about investment from other countries, and now nobody trusts them. That's what happens with credit: if you're not credible, nobody trusts you.] SBHarris 22:36, 29 October 2007 (UTC)
replies: text: While I agree with most of your analysis, I'm surprised that you find reds under the bed.  It has been my impression that the leading oponents are those who want to restore the gold standard (and who are mainly US citizens).  --John Maynard Friedman 13:21, 30 October 2007 (UTC)
replies: text:  Not at all. Read the first paragraph of this section: Both Marxian economists and Green economists view the evolution from fiat-centric to credit-centric regimes as fundamental to global capitalism, as direct imperialism and colonialism is replaced by more local intermediaries, and relations between rich and poor are defined more by debt. Neither this nor most of the rest of the section is written by anybody who is interested in the gold standard. This section is rather an argument about the relative goodness of fiat money vs. credit money (i.e., the last being a sort of representative money backed by private promise of repayment in goods and services, rather than government promise of the same). The idea being argued (advanced and refuted) is that this nasty "new" credit money is part of the global capitalist plot. How dare individuals or businesses dare to issue their own promisory notes!  Unmentioned is that this was the way it was always done, before central banking. Fiat money is the later development, so credit money can hardly be said to be part of the some modern Marx-prophesied movement of the world toward global capitalism, in latter days. Credit money is old-style, not new-style, whatever you think of it. SBHarris 01:52, 6 November 2007 (UTC)
thread_title:  Synthesis tag on Credit money section 

message: Why is there a few lines devoted to the Liberty Dollar, with obvious bias no less.  Why has it stood for so long?  If a contributor really cares about the Liberty Dollar they should make a new article and include a link to that article.  I am removing those lines for the moment.  —Preceding unsigned comment added by 209.240.89.251 (talk) 02:38, 3 November 2007 (UTC)
thread_title: Liberty Dollar Section

message: 1) Try sticking to common language usage when explaining something.  "Quotal", if it is a word, is very rare.  If you must use it, define it or link it.
2) Talking about '1 dollar = 1 oz silver' can be confusing in a theoretical example, because silver really has been used as a commodity.  Try dumbing down the GDP/productivity guarantee to something like '50 cows and 500 sheep', so each of the 100 dollars is 'worth' 0.5 cow + 5 sheep (BTW, this neatly leads to a discussion of specie exchange rates, where 1 cow = 10 sheep) -- 72.1.212.20 21:41, 21 September 2007 (UTC)
thread_title:  Use of language 

message: Wouldn't this read better if written in the form of "An argument is/can be" instead of "They argue"? The way it is written now it reads as though the arguments are false. 85.165.222.180 (talk) 19:50, 19 November 2007 (UTC)
replies: text: No, it reads as though it is their position.  Wikipedia cannot be the arbiter of what is true and what is false: it can only record what specific people have said and produce the objective evidence (if any - if none, say so) for that opinion.  Readers must decide for themselves or consult an opinionated text. --John Maynard Friedman (talk) 13:51, 20 November 2007 (UTC)
replies: text: This whole section is going to be deleted in January anyway, if none of the citations and attributions can be produced.  At the moment it reads like a poor undergraduate debate. --John Maynard Friedman (talk) 13:59, 20 November 2007 (UTC)
replies: text: It's January and no citations have been provided.  Off with its head. --John Maynard Friedman (talk) 14:02, 3 January 2008 (UTC)
thread_title: Wording of Critiques of credit money expansion

message: This is an important article and, as remarked above, does not do justice to the subject. The entire article needs a thorough review by an expert. --John Maynard Friedman (talk) 14:04, 7 January 2008 (UTC)
thread_title:  Expert attention 

message: I chopped the following text out of the article, it seems to be more appropriate in a general history of currency, rather than this article which focuses on fiat currency:
Historically, the names of the individual coins and the names of the unit of account were identical, e.g. a shilling was both a type of coin and a unit of account. The law would therefore recognize tender of those coins as legal satisfaction for debts denominated in that unit of account. Different-mass coins of the same metal could explicitly be recognized as being legally valued at fixed multiples of each other in their names (e.g. in the case of the crown and half-crown) or simply by reference to their legal masses (e.g. the legal mass of a florin is twice that of a shilling). A government could legislate for the minting of a system of metallic currency, including the fineness of the metal and the legal and original masses of the coins, without legislating for legal tender or legal values of the coins themselves — they can be discovered or implied by the ratios of legal masses of fine metal in each species of coin.
Coins of different metals naturally resist incorporation into a common unit of account, and therefore of a common legal tender value system. Governments have historically attempted to fix the legal values of different metallic coins to create a unified unit of account and standard of legal tender for payments large and small. Two mechanisms have been used in this connection: multi-metalism and token coinage. The former took the form of bimetallism, where both gold and silver coins were given legal values in terms of each other. e.g. gold coin was legally valued by nominal mass at 15 times silver coin. As market forces changed the actual value of gold in relation to silver, one coin would become overvalued in reference to the other.  For example, suppose there were two coins, a shilling being 6 grams of fine silver, and a sovereign being 8 grams of fine gold. If the unit of account were the shilling, then the legal value of a sovereign would be 20 shillings, and a debtor could discharge a debt of 100 shillings with five sovereign coins or 100 shilling coins, at his option. Debtors will nearly always choose the cheapest way to discharge their debts, and this results in the constant threat of demonetization of a legally over-valued metal. Token coinage adopts the coins of the higher value metal as the monetary standard, and limits the lower value metal coins to fractional currency. This is done by deliberately over-valuing the legal tender value of the lower value metal coins and limiting the total amount for which they can be legal tender in any one payment. For example in 1816 the English silver currency was lightened by 6% and the limit of the legal tender of 40 shillings per payment was imposed. Such token currency is clearly fiat currency, as it is only by government fiat that the coin can be received at its legal value.
Over time multi-metallism was replaced by gold mono-metalism, via composite standards where gold coin was unlimited legal tender and silver and copper coins were lightened, limited and converted into tokens.   
Bank notes as legal tender by government fiat originate from the advent of central banking. Central banks are banks of issue that are owned, sponsored or favoured by the government. Bank notes are negotiable instruments, being promissory notes issued by a bank and payable to bearer on demand. Central banks are generally favoured with monopoly rights to issue bank notes, and/or for these notes to have the status of legal tender. Alternatively, currency notes can be issued directly by the government or its non-bank agencies, and/or the government can favour selected commercial banks by making their notes legal tender (as in Hong Kong). It is important to note that paper money and fiat currency are not the same. For example, Scottish commercial banknotes act as money, but are not legal tender and therefore not fiat currency.
Aatombomb (talk) 19:27, 7 January 2008 (UTC)
thread_title:  Chopped this out 

message: The whole lead seems overloaded and much of this is addressed elsewhere in the article.
Without government demand for certain kinds of paper as legal tender, such as bank notes, only specie is unlimited legal tender. However this is not universally true, as some currencies, (notably sterling issued by Scottish bankshttp://www.bankofengland.co.uk/banknotes/about/faqs.htm#15), are not legal tender but are accepted by longstanding confidence (Scotland technically has no note of legal tender and thus no fiat money-- see Pound Scots).
A bank of issue whose notes enjoy legal tender status by government fiat can use its own notes, making their redemption in specie optional — a matter of the 'monetary policy' of the bank in question. Historically, the institution of fiat currency has preceded and enabled the demonetisation of specie, via a monetary policy decision not to offer payment in specie at par, e.g. by suspension, devaluation or redemption in bullion or foreign currency instead. Eventually this leads to no form of payment, redemption or exchange whatsoever being offered by the issuer and a system of freely floating national currencies, none of which is "redeemable" by fixed amounts of specie or any given commodity.
Aatombomb (talk) 20:11, 7 January 2008 (UTC)
replies: text: The suggested length for the LEAD of a reasonably long article, is 3 to 4 paragraphs, and for one of medium size as this one is, perhaps 2 paragraphs (15 kB). See WP:LEAD. You've now cut it to two sentences--too much. I'm not arguing about the direction you're going, but am simply adding that those who cut beyond the recommended amount, are under an obligation to restore those sections with fresh summary material of the rest of the article's content, in accord with policy and the manual of style. Deletion is easy; writing is hard. So please attend to both tasks if you edit, not just the one. Thanks. SBHarris 02:36, 11 January 2008 (UTC)
replies: text:  I intend to, after the article itself takes better shape. If you would feel more comfortable putting it back in for now, please go ahead. Aatombomb (talk) 04:07, 11 January 2008 (UTC)
replies: text: I shall wait till you're satisfied with your rewrite. Glad you intend to finish the job! SBHarris 04:38, 11 January 2008 (UTC)
replies: text:  Thanks! I'm trying to do some research on it over the next week or so. Aatombomb (talk) 16:52, 11 January 2008 (UTC)
thread_title:  Removed from Lead 

message: I'd like to add Josua A. Norton in here somewhere. He is a notable case of an individual who issued fiat money that was apparently actually accepted as currency by some residents of San Francisco. 
Aatombomb (talk) 17:10, 11 January 2008 (UTC)
replies: text: I'd say not to. While an interesting curiosity, there are so many cases of fiat currency, they should not all be included in this article.--Gregalton (talk) 17:14, 11 January 2008 (UTC)
replies: text:  On further scrutiny, it's an example of representative currency - so never mind. Aatombomb (talk) 17:24, 11 January 2008 (UTC)
replies: text:  If you're talking about the artist, the notes he makes are not even representative money, but commodity money. The value is in the money-object itself, rather like Picasso making a minimalist sketch on his napkins and signing them, to pay for a meal (which he was known to do).  Some of the careful distinctions between these kinds of money (and examples of them) have been removed from this article. Er, not to be impolite, but in some cases, by YOU. SBHarris 17:41, 11 January 2008 (UTC)
replies: text:  I wasn't talking about the artist. I didn't find the distinctions too careful, myself. I don't own the article, so please add back in anything you think I shouldn't have taken out, especially if you have more expertise on this subject. Aatombomb (talk) 17:46, 11 January 2008 (UTC)
replies: text: Oh, you mean Joshua A. Norton. Arguably a performance artist, if you get my drift. And the bills are (and even were) taken as being worth something for their own sake (as works), not in representation of specie or anything ELSE valuable. But not actual fiat money because Norton lacked any governmental authority. Yes, I know "authority" is a tricky concept. Usually it's connected with divisions and weapons, though, and Norton didn't have any. SBHarris 04:53, 12 January 2008 (UTC)
replies: text: Coupons have "value" inasmuch as they are acknowledged and honoured. Norton's "currency" is no different than old trading stamps or Canadian Tire money Coloneldoctor (talk) 02:10, 22 June 2008 (UTC)
thread_title:  Emperor Norton 

message: Wikipedia is designed to reject and expel experts in favor of the nonsense promulgated by the administrators and bureaucrats.  I'm not helping the inmates run the asylum they've built for themselves out of compressed particle board and barbed wire.  —Preceding unsigned comment added by 67.101.123.88 (talk) 17:03, 23 January 2008 (UTC)
replies: text: In some articles that is unfortunately true (and in my experience it is caused by obsessive editors, not admins) but many editors are trying to fix it - witness this article.  But even experts have to cite their sources: some self-styled experts consider themselves above such petifogging details.  If you provide the citations, nobody can repel or expel you. --John Maynard Friedman (talk) 13:22, 24 January 2008 (UTC)
replies: text: The problem is that flat currency is such a controversial concept, especially politically charged since many Americans still believe the gold reserves at Fort Knox underwrite the American dollar. The problem with experts in the field of economics is, they are as divided in opinion (depending on political affiliation) as any other group of arguing reprobates, arrogantly insisting their way is correct. What the Wikipedia needs is referee-ism to allow multiple schools of thought to be heard in the same article, even though that means it will sound like a CNN screamfest. Which, incidently, is how democracy is often characterised when it is functioning correctly.Coloneldoctor (talk) 02:15, 22 June 2008 (UTC)
thread_title:  Expert wanted 

message: The article now says that fiat money can be issued on authority of a bank, without the government having an opinion. I don't think that's right. The last is "credit money", an important concept in itself. Fiat money is a SUBSET of credit money, in which the government has become creditor(lender)-of-last-resort. In otherwords, it's the government's credit, not the bank's alone. These things should be carefully spelled out here. Fiat currency appeared in the US only during the American Civil War, in the form of greenbacks, backed by US bonds. Before that, in the period between failures of the US bank (back to Jackson) all paper currency was banknotes from state or private banks and was  credit money only. SBHarris 21:13, 29 February 2008 (UTC)
thread_title:  My understanding is that the "fiat" requires a law, aka government mandate 

message: The lead section says:
Easily disproven by the counter-example of the Swiss dinar:
Do you agree with me that this is wrong, and that we need to change the lead section? — Ksero (talk | contribs) 19:58, 17 March 2008 (UTC)
replies: text: Is this an isolated exception that doesn't disprove the general rule?  If so, then it is just a foot note that begins "Well hardly ever:".  If not, it should certainly be changed.  Either way, a bold statement like "There has never been" certainly reads as WP:OR without a citation.  So at the very least, it needs a  tag. --John Maynard Friedman (talk) 13:10, 18 March 2008 (UTC)
replies: text: I've added a paragraph to the lead using this excellent example. The old dinar in Iraq contined to function as a perfectly good credit money, even after the government withdrew support as creditor of last resort. With a government losing power, and in fact behaving irresponsibly money-wise, an old credit money can retain buying power better than a (new) inflating fiat money. The only thing that matters, is whose credit is good. Here's a good example which can be used to show the difference. The Pound Scots is also a good example of credit money which has strong enough backing that no "fiat" is necessary. SBHarris 21:31, 26 March 2008 (UTC)
thread_title:  Error in lead section 

message: I think that this has become a rather controversial topic(at least in the United States, with the elections and whatnot; esp. Ron Paul & Stances) and i just wanted to hark on the fact that the primary portion, the "bulk", of this article seems to have remained unchanged since before most, if not all of the article flags (NPOV, Expert needed, etc.) were posted. I think this is controversial(as i said) (&part of the reason this probably became flagged) and that although most of the data is unverified and isn't exactly NPOV, it IS good data and shouldn't be tossed aside carelessly. Heavily re-worded, and cited, but not thrown out.
137.49.222.44 (talk) 20:05, 7 May 2008 (UTC)
replies: text: It can't become controversial, this issue is controversial. We should welcome the controversy, however, and work to clarify it so the truth of how flat currency affects global economies becomes better understood. Maybe people would stop blaming the Jews.  —Preceding unsigned comment added by Coloneldoctor (talk • contribs) 02:27, 22 June 2008 (UTC)

text: This isn't actually controversial at all, really. Most Americans have no idea what "fiat currency" means and it isn't a part of the mainstream political debate, while economists really agree on it, by and large. Titanium Dragon (talk) 05:31, 22 June 2008 (UTC)
thread_title:  Controversy, Flags, & The State of This Entry 

message: Just as a heads up to those who edit this article regularly. I have created a separate page on currency competition, a topic that is extremely under-represented in essentially every avenue of cultural signficance. Anyone who wants to help bring this article up (and eventually to featured status) is welcome to do so. JHMM13(Disc) 20:17, 11 May 2008 (UTC)
thread_title:  Currency Competition 

message: Fiat money is typically backed by the good faith of the government maintaining or backing the money supply, importantly faith that it will accept the fiat currency in payment of taxes. For example the Federal Reserve banks of the United States maintain that US currency is backed by all the goods and services in the US economy. http://www.treasury.gov/education/faq/currency/legal-tender.html#q2. Hence, the credibility of the government's policy would, in theory, impact the decisions of consumers and producers in a market economy. Under this assumption, economic actors might make decisions they would otherwise not make for fear that the currency or money that they hold will change in value radically. Managing this risk could produce economic distortions: when people convert money to other forms, increasing the demand for goods to be hoarded. Economic actors might also shelter income in other, more stable currencies or charge higher interest rates. 
Under a fiat money system, money ceases to be a commodity like others, and begins to have special and peculiar properties. Instead of focusing on production, investment and consumption, economic actors begin to attempt to divine the actions of government. Since actors can have foreknowledge of government actions in a way they cannot have of a market, this could lead to efforts to bribe, control or curry favor with the entities holding fiat power.
Fiat money is also closely tied to government borrowing for expenditures that do not have a clear social return, or which may have negative expectations, such as wars of conquest. Governments could pay for wars using fiat money, rather than in hard currency or specie, on the belief that the returns of war will be sufficient to pay promised notes, and that during wartime shortage and austerity, goods are not available in any case. This has seldom proven to be the case in the absence of strong inflationary controls. Instead, the usual cycle is for the value of fiat notes to trade at a significant discount to portable and stable forms of exchange, specifically those that will be tender regardless of the winning side in the conflict. A variation on this was the use of fiat occupation currency to place the burden on other areas.
Fiat money is also associated with attempts to control trade: If individuals possess notes which are not redeemable outside of the control of a government, the idea is that they will have to purchase preferentially within the boundaries of the nation, rather than importing; see Protectionism. It was David Hume who first argued that this merely leads to inflation by the quantity theory of money, even if the money is backed by specie.
Another aspect of fiat money is its relation to property rights. Many economists argue that since a government that has control over its territory can requisition, confiscate or otherwise ban the use of specie within its boundaries, or suspend promise payments — as has often happened in the past — the presence of fiat manipulation of money is seen as being a signal that a government is intent on abrogating property rights for other purposes. 
The opposing view is that governments do not immediately intend to confiscate or ban the use of specie within its boundaries, nor reduce the property rights of its citizens. Instead, a government may be oblivious to the root cause of hyperinflation (excessive increase in the money supply). Worse still, a government may be aware of the cause, but choose to ignore the problem as it is not one that will come to light in its current political term.
Some political economists argue that there is no such thing as fiat money, that governments can create fiat currency, but that the amount of money is determined by the valuation of the market place, and that attempts to create fiat currency beyond the demand for money generate inflation. In the words of Keynes, “Money doesn’t matter,” meaning that control of the money supply beyond limited boundaries will be adjusted for in the marketplace; see IS/LM model.
The idea that there is no such thing as fiat money is also consistent with the real bills doctrine. In this view, all paper and credit money is backed by the assets of the entity that issued it — usually by the gold and bonds of the central bank or the tax collecting ability of the government that issued it. Since all modern central banks do in fact maintain assets as collateral against the money they issue, one has to ask why these assets are universally held if, as quantity theorists claim, they are irrelevant to the value of the central bank’s money. 
I've moved the section above out of the article and into discussion here pending its clean up. One or two citation flags might be permissible but the whole section is peppered with them and in this state it does a disservice to the rest of the article.
Bear in mind that this is a controversial subject over which widely differing views are held. Wikipedia requires citation for any material that is challenged or is likely to be challenged. Your safest bet here is to assume that material that does not include a source will be challenged and hence removed.
Think about the suitability of your sources too. For example, a website that profits from trading precious metals may have vested interests and, consequently, a particular view of the subject. Such source doesn't necessarily mean it can't be referred to at all, but it should at least require further qualification.
I've left the section originally entitled "Credit-based monetary systems, where feedback mechanisms prevent Fiat money" in the main article for the moment, though its title is now shortened to simply "Feedback in credit-based monetary systems". As with the above it could also do with some references, but I haven't challenged it just now.
There are also the closing paragraphs in the "Convertibility" section. Again, I'll get to that later if someone else doesn't fix it first.
--SallyScot (talk) 20:41, 25 July 2008 (UTC)
thread_title:  The importance of fiat money as a concept 

message: Do we really need the legal definition of "fiat" right at the top despite the banner with a link to wiktionary? Zain Ebrahim (talk) 17:43, 17 September 2008 (UTC)
replies: text: No, I think we can safely move that down to a noted reference, but leave the info in the article, for those who want to see what "fiat" means legally (and not just in regard to money). SBHarris 19:21, 17 September 2008 (UTC)
thread_title:  Law definition 

message: In 1697 Thomas Neale organised the "Malt Lottery" and the tickets were used as currency, even paying naval offficers salaries in them. Does anyone know anything else about this ?--Streona (talk) 20:25, 12 November 2008 (UTC)
thread_title: Malt Lottery Tickets

message: First half is unsourced blather.  Second part is a summary of one not particularly notable point of view about money.  The article would be better without them.  --Sjsilverman (talk) 02:33, 26 November 2008 (UTC)
thread_title: Concepts Section Should Go

message: Yes, I can see from the citation that he is an academic/economist at the University of California, but can we do better than that?  We don't tend to cite individuals by name unless they are personally notable - a good guide is "is their an article about them"?  In this case there isn't.  So unless such can be written, the text needs to change to say "Some academic enconomists argue ..." --John Maynard Friedman (talk) 20:29, 30 December 2008 (UTC)
replies: text: I've squared the circle by linking to his bio page at the CSU@N web site.  --John Maynard Friedman (talk) 20:44, 13 January 2009 (UTC)
replies: text: I don't see that either Sproul or his theory are notable.  Is he cited anywhere?  If there is no evidence of notability, I will remove this material. - Crosbiesmith (talk) 19:59, 8 March 2009 (UTC)
thread_title:  Who is Micheal Sproul? 

message: since it's in fashion nowadays for conspiracy theories (especially because of 'Zeitgeist') to trasmit the idea that fiat currency is 'teh evil. fs 20:15, 8 January 2009 (UTC)
replies: text: That brings a high risk of editorialising, which has continually plagued this article.  Any proposed text needs to be heavily cited and preferrably test-driven here at talk: first. --John Maynard Friedman (talk) 22:20, 8 January 2009 (UTC)

text: By whom?  In this case, it is one G. Edward Griffin who appears to have no expertise on this or any other subject he cares to pronounce upon.  I'd welcome comment from others but in my view he is not a notable person in this context, such that his opinion has any merit. I think it should be deleted.--John Maynard Friedman (talk) 01:50, 16 January 2009 (UTC)
replies: text:  He is notable because his book is a best seller. Michael H 34 (talk) 00:22, 22 January 2009 (UTC)
replies: text:  But he is a pseudo-ecomomist, a complete amateur who starts from a conclusion and then searches for selective evidence to support it.  His opinion is worthless. But nevertheless, the citation should stand becuase it makes clear that no serious economist supports such primitive views. --John Maynard Friedman (talk) 20:18, 26 January 2009 (UTC)
replies: text: I restored the criticism of G. Edward Griffin because it is notable and reliable. Michael H 34 (talk) 22:50, 27 January 2009 (UTC)

text: What I said was that, since you have a financial interest in this subject, you need to be aware (as does everyone) of WP:Conflict of interest, and therefore that you need to be scrupulous in observing WP:NPOV.  I went to your page to comment on the way that you had nuked a citation, only to find that someone else had already done so. --John Maynard Friedman (talk) 20:18, 26 January 2009 (UTC)
thread_title:  This needs a rich advantages/disadvantages section 

message: AFAIK, no currencies today are on a gold standard, or other standard, where I can go in to the bank and swop the notes for gold, silver or some there valuable commodity. Even currencies which a pegged, are all ultimately pegged to somebody else's Fiat Currency. Can anybody comment? TiffaF (talk) 09:28, 26 January 2009 (UTC)
replies: text: Are there any shell money economies still in existence? Otherwise I suspect that you are right. --John Maynard Friedman (talk) 20:20, 26 January 2009 (UTC)
replies: text: Then perhaps it should be made clear in the article. At present it reads as if it is one of many types of money, e.g. "Fiat money is not necessary for large countries" TiffaF (talk) 13:14, 27 January 2009 (UTC)
replies: text: There exist national moneys are that NOT fiat money. And some banknotes are not fiat currency-- they are simply a form of credit money from the bank. An example of both cases is the Pound Scots which functions as money in Scotland, a country which indeed has no fiat currency (currency officially declared legal tender by the government) at all. Just because a note is not representative money (backed by specie or a very specific aount of some good), does NOT mean it's fiat money. A simple note of credit on the bank (a banknote) can be redeemed for anything else the bank owns. For example, if the bank owns a house from a mortgage foreclosure from failure to pay, then the bank will be perfectly willing to give you the house in exchange for its banknotes. Thus, they are (in effect) backed by the houses the bank owns, and so on. It's not gold-backed money, but it's still a goods-backed money. So it's a sort of representative money, except what it represents is not specified. A certain claim on the bank's assets as they are a generic, is what it is. SBHarris 23:52, 8 February 2009 (UTC)
replies: text: The nature of money. All money is decreed money...fiat... whether of silver, gold, paper, barley or shells or houses etc. It is based on contracts and law. In other words civil society constructs... mainly coming from the Sumer area originally in the period when writing was first invented... then spreading into Europe though Greek and Italian city states from the Phoenicians much later http://phoenicia.org/interest.html - skip sievert (talk) 02:58, 5 March 2009 (UTC)
thread_title:  Is there any modern currency which is not a Fiat Currency? 

message: May I draw editors attention to Wikipedia:Fringe theories.  Where the works of people who have no experise in the subject are cited, it is important in complying with WP:NPOV to make that clear. --John Maynard Friedman (talk) 00:06, 4 February 2009 (UTC)
replies: text: Yes, Griffin is a complete amateur and his comments deserve the same citation value as we give to comments by pseudo-scientists on real science.  I take Greenspan more seriously but that was a very long time ago and today it is incredible that every economy work on specie.  The Specie Circular shows exactly what can happen when there is insufficient gold to support economic activity - a shortage of a specific and otherwise non-essential commodity brings the economy to a halt and you get events like the Panic of 1837. --John Maynard Friedman (talk) 21:41, 8 February 2009 (UTC)
thread_title:  Citing sources in the "criticism" section. 

message: The last sentence in the following excerpt from the "criticism" section should be removed. 
The Austrian School of Economics has long held that no sound economy can long endure under fiat money, with prominent Austrian Economist Ludwig von Mises arguing in this book Human Action that, "What is needed for a sound expansion of production is additional capital goods, not money or fiduciary media. The credit boom is built on the sands of banknotes and deposits. It must collapse."  However, the Austrian School is outside the mainstream of contemporary economics.[14]
 The last sentence above creates the logical fallacy of argumentum ad populum (Latin: "appeal to the people"), in logic, is a fallacious argument that concludes a proposition to be true because many or all people believe it; it alleges that "If many believe so, it is so." The criticism is stated, and then the second sentence characterizes the criticism as a minority view, which engages in the fallacy just listed. This is the "criticism" section, not the "criticism of the criticism" section. The language is also biased. If the criticism of the criticism should stand in this section, the cliche "outside the mainstream", which has a negative connotation, should be re-worded to eliminate bias. I've looked through Wikipedia articles with "criticism" sections, and I cannot find a similar biasedly written criticism of a criticism. You certainly won't find it on the entries "Capitalism" or "Marxism". It should not be here.76.105.195.53 (talk) 01:54, 5 March 2009 (UTC)
thread_title:  Logical fallacy in the "criticism" section should be removed. 

message: If anyone could cast light on the orgin of the term 'Fiat money' that would be a great addition.  Using the Google archive search, the term appears to have popped into existence in 1878.  - Crosbiesmith (talk) 18:25, 8 March 2009 (UTC)
thread_title: Orgin of term

message: About two thirds of this section is totally unreferenced.  The remainder appears to be the unpublished theory of Michael Sproul.  I will remove this material if sources are not available. - Crosbiesmith (talk) 21:03, 9 March 2009 (UTC)
replies: text: Re Sproul & "There's No Such Thing As Fiat Money", rather than dismissing this on the grounds of its source not being notable enough, it would be interesting to hear some objection to the argument itself - e.g. if it were felt to be a bit loopy or fringe. What I like about the idea of it remaining in the article is that this would perhaps invite some further counterpoint. And that, on the whole, would help my understanding. --SallyScot (talk) 00:03, 10 March 2009 (UTC)
replies: text: I don't think it's loopy.  However, Wikipedia's criteria for inclusion are notability and verifiability.   Any editorial commentary on the article would be original research.  If published third-party criticism of the paper exists, by all means add it.  As I don't see any evidence of Sproul's notability, I will remove this material in due course. - Crosbiesmith (talk) 22:19, 16 March 2009 (UTC)

text: Perhaps the article, rather than mentioning Sproul by name, could be reworded simply to suggest that there is an argument or a view to the same effect, i.e. that there's no such thing as fiat currency (etc). Arguably, Sproul isn't notable enough to warrant mention by name, but I don't think this merits dismissal of the point altogether. Wikipedia's criteria of notability and verifiability are really two different things. Notability is a prerequisite criteria for articles themselves, i.e. ensuring that the subject is sufficiently noteworthy to merit a Wikipedia entry. It doesn't follow that an article's supporting references all need to be from sources noteworthy enough to each in turn have their own Wikipedia article. --SallyScot (talk) 19:56, 17 March 2009 (UTC)
replies: text: As I say above, I don't see that either Sproul or his theory are notable.  If this theory is published somewhere other than Sproul's website we can evaluate that as evidence of notability.  The self-published working paper is not evidence of notability.   Verifiability is not an issue; the fact that a theory exists does not require verification. - Crosbiesmith (talk) 20:55, 17 March 2009 (UTC)
replies: text: Removed the first two completely unsourced paragraphs as there has been no comment. - Crosbiesmith (talk) 21:46, 18 March 2009 (UTC)

text: Removed not-notable, self-published Sproul theory. - Crosbiesmith (talk) 19:26, 28 March 2009 (UTC)
thread_title: Concepts

message: The section 'Fiat money and the concept of legal tender' makes no mention of fiat money.  All the material in it concerns legal tender.  There is no attempt to link the two concepts.  I will delete this section in due course. - Crosbiesmith (talk) 07:47, 21 March 2009 (UTC)
replies: text: It's a little easier just to add the connection. I'll try it. SBHarris 05:41, 22 March 2009 (UTC)
replies: text: Thanks. - Crosbiesmith (talk) 08:47, 22 March 2009 (UTC)
replies: text: Still, that section is almost completely about legal tender rather than fiat money.  It should in the legal tender article unless it is there or already.  I will move it or remove it from this article. - Crosbiesmith (talk) 08:08, 4 April 2009 (UTC)
thread_title: Fiat money and the concept of legal tender

message: :The following discussion is an archived discussion of the proposal. Please do not modify it. Subsequent comments should be made in a new section on the talk page. No further edits should be made to this section. 
The result of the proposal was PAGE MOVED per discussion below. The history was broken, actually, from a cut-and-paste move from Fiat money to Fiat currency in December '05. The history is patched back together now. If there's anything I missed, please let me know. Oh... I suppose I should move this talk page, too. -GTBacchus(talk) 03:19, 27 March 2009 (UTC)
replies: text: Sounds like a good idea. skip sievert (talk) 15:27, 21 March 2009 (UTC)

text: It does sound like a good idea. In my experience, the term "fiat money" is common in actual usage; in any case, the concept refers to the total supply of some money rather than the denominated units of it, so the distinction is correct. — Gavia immer (talk) 16:55, 21 March 2009 (UTC)

text: Makes sense to me. --JBC3 (talk) 05:50, 22 March 2009 (UTC)

text: To me as well. SBHarris 05:51, 22 March 2009 (UTC)

text: The above discussion is preserved as an archive of the proposal.  Please do not modify it. Subsequent comments should be made in a new section on this talk page. No further edits should be made to this section.
Thanks, GTBacchus. Nice job on the patch up and move. It's not perfect but it continues to improve. SBHarris 03:23, 27 March 2009 (UTC)
thread_title: Article title: Fiat money

message: WP articles should not be so technical as to be unintelligible to the Average Reader, nor should they be subtly biased so as to support one school of thought over another school. 
I think this article falls on its face in both respects. One is easier to see than the other, though. There is much detailed analysis about the history of various sorts of money (fiat money, credit money, specie money, tax backed money, ...), but the effect, as with so much economic writing is more fog than clarity. WP articles should be better written and more understandable than that. Even in a field as bestrewn with arcane experts and expertise, much of it mutually exclusionary. Someone who understand the field and its jargon and who can write clearly is badly needed. 
ON the second point, there is a sense (to this reader at least) that the underlying approach of the article is discussion of a dodgy business, this fiat money. One which is fraught with problems and fraud. Regrettably, this leaves unsaid that currency manipulation is known to have predated by a long time the invention of fiat money by the Chinese (if it was they who did so -- the article is not clear on that point just now -- a poor writing issue). Currency debasement was an issue early on in Anatolia if some of the Greek sources I dimly remember can be trusted, and it was certainly so recurrently throughout the history that we have not lost. A better account then would start with the clear statement that no fully satisfactory practical method of managing currency (and so a money supply. Indeed there is no mention here of the concept of a money supply and the necessity of some rough parity between the size of an economy and the size of its money supply). 
All methods tried to date have had considerable troubles in actual practice. Layered on top of this patchy and dodgy experience is a bramble patch of theoretical analysis schools, each declaiming with solemn authority (backed by abstruse and exhaustive (well certainly exhausting) analysis) which purports to show, from first principles in each case, that this or that way of managing currency is the only sensible one. Thet they are mutually exclusive in most respects, seems not to affect the importance accorded to the economists and analysts who intone solemnly and portentously. Practical operators, who are devoted to one or another school, predictably those which benefit their interests, have demonstrated that they are unable to operate sensibly in practical applications, much less theoretical analysis. 
If both practical (however implicitly including some theoretical perspective) and formally theoretical approaches are dubious as ways of judging this or that approach to currency structure, this should be reflected in this article and its parallel articles. It is not. And all this is the other hurdle this article trips over and so fails to reach any sort of satisfactory finish line.  
Not being in the field, nor a sufficiently extraordinary writer, I can't myself fix this. Some editor surely is in a postion to do so. Please, take a whack at it. I don't think it can be really a lot worse, so the downside risk is low. 
Anyone?  ww (talk) 01:09, 25 March 2009 (UTC)
replies: text: The contributors watching this article are likely to be the contributors who got the article to its current state and who are doing their best, or have already done their best.  Why not find an article you do like on an economics topic and request assistance there? - Crosbiesmith (talk) 19:16, 25 March 2009 (UTC)
replies: text:  I've added a bit to the opening paragraph. A fiat money, as a legal tender for all debts, is basically backed by any good or service in the country's economy which is for sale, and incurs a debt. All moneys need "backing", and "fiat money" is simply money which is backed by anything in the economy which is bought or sold. Including specie. What's the difficulty in understanding that? Whether it's a good idea is something else again, but in practice it works as well as anything else. It seems a bit silly to have the entirely world economy backed by "gold" or something, since what can you do with gold? Didn't you ever see that great Serling Twilight Zone where the robbers make off with gold bars and wind up (after cryogenic suspension) in a desert of the future where they have all the gold they can carry, but little water? This causes the "value" of gold to fluctuate wildly. Then we find out that gold in the future is worthless anyway, since it can be synthesized? It's a nice little exercise. SBHarris 03:41, 27 March 2009 (UTC)
replies: text:  Saying it's backed by "any good..." is not true. If you accept paper money today, who is to say what you will receive for it tomorrow ? Just ask Eddie Cross who contributed 40 odd years to a pension fund and when he received the cheque it wasn't enough to fill up his car. In the case of Zimbabwe the central bank was not independent. Even if the central bank is independent, the currency can still loose significant purchasing power (even after interest income) because the central bank will not have the access to the correct financial instruments to hedge against inflation. -- Nic Roets (talk) 23:39, 27 March 2009 (UTC)
replies: text:  That's the central bank's fault, then! Adjusting the money supply so that it tracks the amount of goods and services in a economy is not rocket science: see core inflation and consumer price index. If goverments refuse to do this, out of greed or corruption, then there are bad consequences. But requiring some odd money standard to keep politicians from printing money to buy votes with, is not the answer. In practice, corrupt systems find a way around this, no matter what. Historically, the gold standard has had problems even when governments were honest, as the world gold supply sometimes did not keep up with the expansion of the economy and need for money (resulting in deflation and historically the adoption of bimetalism). And in theory the opposite could happen if vast new gold deposits were discovered, or if people lost confidence in gold because it cannot be eaten or lived in. All in all, it's better to trade goods for goods, with no intermediate metal "standard." But since barter is not very convenient, it's often better to keep track with paper. To keep that from being counterfeited, you may make some of it "official." And there you have fiat money.  But please remember that fiat money is not the only money, even in societies that have it. Every time you write an IOU or originate a loan, you create a "money." If you buy and sell loans (see various kinds of "credit derivatives"), you're printing your own money. The colapse of modern financial systems is not due to misuse of fiat money, but due to misuse of other instruments as tradable "money" when their backing (AAA ratings, etc.) was far shakier than anything done by "fiat" via the federal reserve system. SBHarris 23:38, 28 March 2009 (UTC)
replies: text:  Targeting money supply in an open economy is extremely difficult ! Loans denominated in foreign currencies, effects of derivatives etc. Inflation targeting is a bit easier, but the BoE, the SARB and a few others missed their targets recently, despite employing "rocket scientists". Central banks have also made mistakes in the past by e.g. believing in the Phillips curve and not because they were corrupt!. I do agree with you that fiat money is generally a good thing, but words like "generally" and "basically" should be used sparingly in wikipedia. -- Nic Roets (talk) 16:27, 29 March 2009 (UTC)
thread_title: general problems with article

message: User:Ivanleo removed the following statement from the text - 'Federal Reserve Notes receive no backing by anything.'  The statement was taken from the Treasury Department web-page FAQs: Currency - Legal Tender Status.  I added this statement to the lead.  The reason I did so was because this same page was used to support the statement 'In another sense however, they are "backed" by all the goods and services in the United States economy'.  To use the source to support the second statement without mentioning the first would be to quote the source selectively.  If this source is used, both statements need to be given.  Furthermore, as the article stands, the words 'in another sense' make no sense in the absence of the first statement.  As the first statement has been removed, I will also remove the second. - Crosbiesmith (talk) 17:11, 14 April 2009 (UTC)
thread_title: Backing

message: User:Sbharris - in the section 'Value when a fiat money loses backing' you have added the source Economic Policy and Prospects in Iraq.  This article does not mention fiat money.  It does not discuss backing by private banks or acceptance  by individuals.  It does not support the claims made in the section. - Crosbiesmith (talk) 20:26, 17 April 2009 (UTC)
replies: text: It seems both Mervyn King and Hal Varian have discussed this.  Their comments are linked from this blog entry: .  Perhaps these would be useful sources on the Swiss Dinar? - Crosbiesmith (talk) 20:38, 17 April 2009 (UTC)
replies: text:  The Foote article: Foote, Christopher; et. al., 2004 (Summer), "Economic Policy and Prospects in Iraq", The Journal of Economic Perspectives 18 (3): 47-70"  Does discuss these issues. That was the reference that was supposed to be used here, and the one that IS used in the Swiss Dinar article to back this history. I've added it. SBHarris 02:21, 18 April 2009 (UTC)
replies: text: Is this article, Economic Policy and Prospects in Iraq, as available online, your source?  This version of the article does not support the claims made in the section. - Crosbiesmith (talk) 07:18, 18 April 2009 (UTC)
thread_title: Swiss dinar - sources

message: I have questions about, "Alan Greenspan, Federal Reserve Chairman from 1987 to 2006, was an early critic of fiat money arguing in his essay, Gold and Economic Freedom, that . . ."  Since fiat money has been around and controversial for a long time, how could he have been an early critic?  Was this wording meant to convey "early in his career. . ." or something else?  Also, isn't a comma needed before "arguing," or am I reading the sentence wrong?  68.83.72.162 (talk) 18:45, 26 September 2009 (UTC)
thread_title:  Alan Greenspan 

message: Determining what the purchasing power of a fiat currency will be, seems an ill explored area in economics. The only theory I have come across in my research of this area is Ludvig Von Mises' Regression theorem . I think that some mention should be made of this work and or rival theories (if they exist).Reissgo (talk) 23:38, 8 November 2009 (UTC)
replies: text: Please write a short paragraph.  If you can find only one item in the literature, then it can't be given more than a couple of sentences.  If it is your field, you might want to review WP:OR before beginning. --John Maynard Friedman (talk) 20:44, 9 November 2009 (UTC)
replies: text:  Ok, done. I know my reference is not in the right format - I wonder if someone could correct that for me, I'm not sure how it works.78.143.205.244 (talk) 08:56, 10 November 2009 (UTC)
replies: text: Done - and thank you for the material.  For future reference you could (a) copy an existing citation and change the details or [well, AND, really], read WP:Citing sources.  Now all we need is an article about Ludvig Von Mises! --John Maynard Friedman (talk) 11:41, 10 November 2009 (UTC)
replies: text:  Oops! Its Ludwig, not Ludvig. - now fixed.Reissgo (talk) 13:12, 10 November 2009 (UTC)
thread_title:  The purchasing Power of a Fiat Currency 

message: A user at 85.24.170.53 added the claim "It derives the value it has from the beliefs from the economic actors."  This seems to be based on the blog post Gold - a six thousand year-old bubble, though this is not made explicit.  A blog-post is not a suitable reference for such a claim.  I have tagged it as unsourced. - Crosbiesmith (talk) 19:08, 17 November 2009 (UTC)
replies: text:  The question is to find "The purchasing Power of a Fiat Currency". The question is not "Why does the currency have any purchasing power at all". I think Willem Buiter's theory should be removed altogether from this section.Reissgo (talk) 20:52, 18 November 2009 (UTC)
replies: text: I don't follow? Willem Buiter doesn't appear in the article as it stands? --John Maynard Friedman (talk) 15:53, 23 November 2009 (UTC)
replies: text: Ah, I see - he is the blogger.  Ok, I agree, when he publishes under his onw name, we can include it. --John Maynard Friedman (talk) 15:55, 23 November 2009 (UTC)

text: The claim has now been referenced to the paper Money and Prices: A Model of Search and Bargaining by Shouyong Shi.  This paper describes a mathematical model of a money economy under certain assumptions and deduces certain properties of that model.  No attempt is made in the papers to validate the model against a real economy.  A key assumption is that 'a money holder spends all her money in each trade'.  This paper does not demonstrate the fiat money 'derives its value from the beliefs of the economic actors that use it.'  It does not attempt to demonstrate anything other than the properties of the model described.  I am tagging this as 'not in citation given'. - Crosbiesmith (talk) 20:57, 24 November 2009 (UTC)
replies: text: Ok, why not remove it then. The claim (any claim) should be made in a body section somewhere first and just summarized in lede. Kbrose (talk) 21:41, 24 November 2009 (UTC)
replies: text: I thought it might be controversial.  Anyway, following your encouragement, I've removed it.  Your point about claims in a lead is one I will bear in mind.  Thanks - Crosbiesmith (talk) 21:47, 24 November 2009 (UTC)
thread_title: 'beliefs from the economic actors"

message: Kbrose - you added the Expert-subject tag to the article, giving the reason 'too much controversy in talk page, and too few reliable sources'.  Can you indicate a specific controversy which merits the tag, and a specific claim from the article which is not reliably sourced please?  If no specific criticisms are made I will remove the tag.  Thanks -  Crosbiesmith (talk) 19:06, 27 November 2009 (UTC)
replies: text: It appears that there seems enough controversy in defining the term, and citations have been given for various statements of definition and we have agreed on removing at least one of them recently. The tag is not meant to mean that the past editors are not experts at all, but the past history doesn't bear it out, IMHO. I think someone is needed to provide good references as to accepted definitions of the terms, as I found that many citation on the web are simply copying others, often from WP, and the authoritative references may not be easily found online. I have looked with limited time given, so I may be wrong, but the tag might alert and motivate some knowledgeable reader to provide insight, rather than just walk away and dismiss WP as a poor reference. Feel free to provide this yourself in a manner that is convincing. This is not meant to offend in any way. Kbrose (talk) 19:35, 27 November 2009 (UTC)
replies: text: The definition given in the lead sentence isn't an issue as it is sourced to a third-party publication.  If someone objects to to the reliability of this source that will be an issue.  If we have two reliable sources which contradict one another that will be an issue.  The only recent controversy has been that Willem Buiter has publicly stated that Wikipedia's current definition is wrong.  Willem Buiter's unreferenced assertion in a blog entry does not invalidate the existing published source and is not a reliable source in itself.  - Crosbiesmith (talk) 20:15, 27 November 2009 (UTC)
thread_title: In need of attention

message: Keynes defined fiat money as follows:
Fiat Money is Representative (or token) Money (i.e something the intrinsic value of the material substance of which is divorced from its monetary face value) - now generally made of paper except in the case of small denominations - which is created and issued by the State, but is not convertible by law into anything other than itself, and has no fixed value in terms of an objective standard.
()
I will add this to the article lead as an additional defintion. - Crosbiesmith (talk) 17:00, 28 December 2009 (UTC)
replies: text: Added. - Crosbiesmith (talk) 16:07, 29 December 2009 (UTC)
thread_title: Keynes definition

message: The current article states "Fiat currency was anathema to American president Andrew Jackson. Jackson went so far as to pass the Specie Circular in 1836, which required all payment for government lands to be in gold or silver coin."  This is unsourced.  I doubt there is a source as fiat money was not at that time in use in the U.S.  The Specie Circular was intended to combat the use of bank-issued credit money, not fiat money.  I will remove these claims shortly. - Crosbiesmith (talk) 13:12, 30 December 2009 (UTC)
thread_title: Criticism