We use money in our everyday life. To be exact, we use FIAT money (banknotes and coins) which do not have REAL value. It only has value when the government says so.
Why? Because the crazy inflation accumulated since 1971 when the gold standard was abandoned. In the years before 1971, inflation can only be done when there was new gold in the vault (theoretically at least). Gold is so rare and precious and it was not easy to find bulks of gold then in order the produce the new banknotes.
In those days, money retained their values. But today the money supply can simply be inflated by making loans.
we are persuaded, tempted and 'have to' make loans thus increasing the overall public debt.
Look at our homes, cars, credit cards..it's all about debts.
Today , new money pours into the circulation because of the debts. Government needs debts to prevent the economy from collapsing. That's why we always hear the word 'deficit' when talking about government annual budget.
It's not a matter of IF but it's matter of WHEN our financial system will collapse in the future? We are all forced to use the FIAT money! If government didn't exist, the FIAT money would have no value at all because nobody backed its value.
If all parties paid all their debts..there would be no money in circulation which means no business can be done.
Imagine in the distant future that our generations would buy an egg for USD100,000. Ever heard about Zimbabwe hyperinflation. That's ridiculous right? We are living in 'real' economy?
I'm no way an expert of financial system..but if you have opinion please share it...Thanks for reading