Today, the world is experimenting with a total fiat money system. That is, paper and electronic money that are not redeemable for gold or anything of value, unlike in the past. Accordingly, the world has observed countless economic and monetary crises worldwide, with the current global crisis being the latest and most severe since World War II.
The reason why the world adopted a total fiat monetary system was not grounded in economics but rather, in politics. Money, when not redeemable for gold, gives immense benefit to those who issue it and use it for the first time – that is the rationale for why counterfeiting is illegal. Today, most money is issued by commercial banks in the form of mere accounting entries when they give out loans, thereby enormously benefiting bankers from the first use of money that is created out of thin air.
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