Fiat Money Is Doomed. The Urge For an Alternative Currency System is High
Jim Reid, the Deutsche Bank lead strategist, released a research paper, presenting the results of his meticulous study of traditional money and what the future might be holding for it. It’s not often that we hear statements diminishing cash money that comes from key bank personnel. Reid speculates that we may soon experience the “start of the end of fiat money”. His statement has shaken the millions and erupted a heated debate, adding more fuel to the fire between the physical cash patrons and the opposing power of cryptocurrency supporters.
“Central banks and governments which have ‘dined out’ on the 35 year secular, structural decline in inflation are not able to prevent it rising as raising interest rates to suitable levels would risk serious economic contraction given the huge debt burden economies face. As such they are forced to prioritise low interest rates and nominal growth over inflation control which could herald in the beginning of the end of the global fiat currency system that begun with the abandonment of Bretton Woods back in 1971.”
In other words, Reid expresses his criticism towards the centralized nature of fiat currencies and central banks, governments and related authorities in power to conduct manipulative activities with paper money, as well as inflation rates. The fiat money — the currency that is issued by the government and is not backed by the gold or silver reserve — will be “seriously tested” in the coming years.
“It’s possible that inflation becomes more and more uncontrollable and the era of fiat currencies looks vulnerable as people lose faith in paper money,” added Reid.
Despite the skepticism and pessimism poured by a number of financial analysts over cryptocurrencies and the blockchain technology itself and its mainstream adoption for everyday transactions, the reality dictates its rules and the opposite is more than just a speculation or a “conspiracy”.
Cryptocurrencies like Bitcoin have an undeniable advantage over traditional currencies. Not only are cryptocoins voluntary, but they also do not brutally enforce regulations and policies. What is more, individuals and businesses are not obliged to use the digital currency for leverage. Thus, the cryptocurrency truly is a democratic and safe asset that will only gain more power and recognition with time.
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