The problem is that its also a commodity whose value is constantly changing. If people can't figure out for themselves why its not desirable to peg the value of their currency to its whims, even as they watch the effect surging oil commodity prices are having on the economy and the role speculation plays in that, then there's no way to spell it out to them.
Especially when they assume quantitative easing is the problem with fiat currency, while failing to grasp completely why its used and how it has to be used responsibly; and that there is no contradiction in that or in the fiat money system.
Expansion and contraction of the money supply is a tool that's existed for well over half a century and has been used to regulate and normalize the economy. This is just the latest buzz word people like to toss around as they look for the simplest of explanations to explain the current economic reality, and in doing so miss the mark completely.
Actually, screw the mark, they're nowhere even close to the real target. Here is a better symptom of it distilled to its condensed form:
Quote:
Why is the national debt a problem? Borrowing because we can’t pay for commitments we’ve already made—for example, social security, national defense, and Medicare—means we’re passing our costs down to our children, and burdening them with a growing mountain of debt. This has serious consequences:
• Each year, we’re paying more interest on the debt than the year before. Unless current trends change, the interest payment will be more than $1 trillion by 2020—or 20% of all federal revenue. That money is needed elsewhere.
• Most economists believe that, if the deficit keeps growing as a percentage of GDP, economic growth will slow, and that would have a sharp impact on employment rates and our standard of living.
• The more we owe, the harder it will become to find lenders to keep financing us. When we do find lenders, they’re likely to demand higher interest rates… which would increase the deficit even more.
• The debt has reached record levels just as the first baby boomers are turning 65. Spending on Social Security and Medicare will soon consume an even bigger chunk of federal revenue.
• Since May, 2010, China has held a larger portion of our national debt than any other country. By buying Treasury bonds, China keeps the value of the dollar high in relation to the yuan—making it cheaper for Americans to buy Chinese imports and more expensive for the Chinese to buy anything made in the U.S., and thereby ensuring that the already large trade deficit between our two countries will keep growing.
• At some point, our debts must be paid. This will result in a lower standard of living for most Americans.
http://news-basics.com/2010/deficit-and-debt/
The current expansion of the money supply serves as only a useful tool to distract attention away from the fact that the US national debt has nearly doubled since 2000, and keeps attention away from the underlying questions as to why its grown so big so fast, why is nothing being done to address this, and what happens when the inevitable day comes that US T-bills are no longer the safe investment vehicles they're seen as being today as less risky alternatives replace them. Which will require higher interest rates to attract investors, and mean a larger portion of GDP is spent just to pay the interest.
Note too that not too long ago only 25% of T-bills were held by foreign investors. Today its closer to 50%. That means 50% of the interest paid out to service that debt is money coming out of tax payer pockets and going directly into the hands of foreign nations (and where China is concerned, foreign government).
But hey, if you think eliminating the fiat system will make that debt go away or lower the interest, then I have no counter to whatever line of reasoning you're using to make that leap.
-Spyder
