Hmmm. I think you stumbled across the real reason with your "fear of the unknown" - I strongly suspect that Americans are in a comfort zone, one which they fear to venture out of.
The reality is already that the American government is shocking in the treatment of it's citizens. I strongly dispute that the legal system is "fair to all", the rich get great lawyers and get away with murder, while the poor are bullied by police in false confessions or slapped into jail based on faked evidence. America jails about 10000 people a year WRONGFULLY, and exonerates only 200 or so. That's a TERRIBLE legal system, and I would not put my faith in that.
This is the country which is after Assange for publishing the truth, the country which is after Snowden for letting Americans know that their government is spying on each and every one of them. No my friend, the USA is already WAY past the point where it needs to be stopped. The governmental machine is druk with power and feels nothing for the rights of the individual.
Crypto is already a necessity, but I have news for you: even if crypto didn't exist, the days of the dollar remaining king would still be numbered.
I predict that we will increasingly see power shift from West to East within our own lifetimes. The West is tied up in bureaucracy, inefficiency, political correctness, anti-military sentiment and general corruption, while the East is going about it's business of growing in size and power.
I don't fear the unknown, I embrace it. I fear that the status quo remains - in which case the tyrants will become increasingly worse. Nobody wants a violent revolution - but that is a possibility if things remain as they are. America fought the Brits for independence, they fought themselves too. Never be afraid of fighting for what is right.
Waiting for my lunch to come at the moment, so I've got until my food comes to finish this post!
Yes, we have a lot of bad actors that manipulate the law to favor themselves. But the reality is that common law generally applies to everyone. There are people beyond the avg that are disenfranchised and treated differently when the same law is applied. But again, it's less the norm, and more the outlier. The rule of law remains the strongest point here. And it's important to seperate the types of laws. Civil laws here are unbalanced, but the economy isn't based on civil law. Instead the laws that govern economics (property rights ans intellectual rights for example) are the ones that help push America forward.
When I speak of the unknown, I look at the society's that have collapsed. I haven't studied it, but there are really only two ways to collapse a society. Either it occurs forcefully through a take up of arms, or fiscally.
In the past, as in before fiat, economy was tied closely to gold and gold reserves. It's silly that economy has to be tied to a precious metal. When your out of it, people who are willing to work can't work because you can't pay them?
The willingness for humanity to work transcends currency, for that reason a fiat currency is the only system that will allow humanity to grow.
Part of theunknown thing I mentioned is that crypto) also fiat) has no way to be controled. It's both good and bad.
For example, if there is a relaxation in an economy, and less money being moved around (ie velocity of money) you will have less economic activity and unhappy people. In order to spur economic activity, you need to reduce prices so people start spending more, or lower the cost of borrowing.... So people can spend more. This ofcourse is economics 101.
Without that tool (and reality the power of centralization) then you will have wild swings when you price things in one currency.
In real terms, a steady inflation is the way fiat currency needs to grow and how that inflation occurs is imperative to controlling economics.
That's how I see it atleast and I've been constantly trying to find another way to view it because there must be more than one way to have honest money without a centralized system (not that the US acts honestly with their money anyway).
I disagree strongly on the need for fiat, I also disagree with government interference in economics. The state has entangled itself in all things money, to the degree that it is commonly believed that it must be that way. It must not.
The state exists to serve the people. The state was created BY the people as a way of making life simpler, cheaper and easier. We didn't all want to take our own trash to the dump every week, we wanted a service to put out home fires, we wanted a few centralised entities that we could pay to deal with this things on our behalf. What we did NOT want was a monster entity that rules over us with an iron fist, something which sucks funds faster than anything else and which is extremely inefficient. No, the state has grown into an evil behemoth, and to a large degree it's done so on the back of fiat currency.
What Economics 101 often gets wrong is that GDP growth is not real when it forgets the effect of inflation. What Economics 101 blatantly ignores is that inflation hits the poor the hardest, while simultaneously enriching the rich. You can't take a market average for something like this, that "average" hardly represents anybody!
Fiat is VERY simple: it enriches the rich and keeps the poor poor. That's it. End of story. Only a scarce resource like Gold or Bitcoin can prevent this, because such a thing prevents the rich from literally printing themselves more wealth.
Here is where it gets complicated. Societies that have used gold to measure wealth, went in conquest to destroy other nations in order to aquire the wealth.
One could argue that with gold, you would never be able to run deficits since your paper currency would be backed by equal gold.
The problem here is that when money is needed, it would be very difficult to get since you have to go and find ways to aquire more gold. If I was Microsoft and needed to grow to the next level but I didn't have 20 billion to fund a new project, then I would need to wage war, or spend an extraordinary amount of time to find investors.
This is where fiat shines.
When it comes to full scale governments, their abuse of fiat is what causes inflation.
It is possible that if bad actors did not exist, then fiat could expand the money supply as needed and reduced as needed to avoid inflation. But this is not the case because government spends more than they can generate. That's what throws the balance off.
While you are 100% correct that inflation makes the rich richer, it isn't any different with gold. The real difference is in who the actors are. Those who had gold alway acted to get more. And they will go to great lengths to source it, even if it means traveling across the ocean to destroy another civilization. Again not that fiat hasn't also caused this, it's just the actors taking advantage of the system.
You make a good point. I guess my counter-point is that fiat makes it easier for the bad actors to manipulate the system to their advantage. Also it enables inflation - which is (quite literally) a killer.
Microsoft could always take out a $20 billion loan of gold backed currency, and if they can't - well then maybe avoiding that sort of debt is a good thing. Current debt levels are going to sink our economies.
Sadly you have a good point about people fighting to grab what they need. We are still rather vicious and primitive beast by nature. This is partly why blockchains are so great - the transparency of transactions and the difficulty in generating endless funds ensures some sort of accountability - even for bad actors.
I think a lot about how a company could borrow in a gold backed economy.
The bank would have to have a large gold reserve in order to back the loan up. If the paper currency was backed 1:1 with gold (ignoring the $/oz or whatever it comes out to be), then the only way for the bank to issue the loan would be to practice fractional reserve banking.
If the bank litterally did not have enough gold, then Microsoft would need to go to multiple banks and receive multiple rates. It makes it difficult to do business in this manner, but you could then perform a swap with another firm to normalize your rate if you wished to.
At the end of the day, there is a time and place for fiat and I think fiat has allowed our economy to boom. By the same account, the abuse with fiat is absolutely real, and the downfall from too much debt is also extremely real.
I do not doubt that the next fall will be a result of debt, as it almost always has been.
One thing about todays society that I think we all discount is that every government runs on an inflationary fiat model and nearlly all governments have the same debt problem. In fact all debts are intertwined with each other to the point that if one fails, others will be equally damage or fail too. For that reason, there is robustness in the system since there is a common goal to not fail. Perhaps the only way out of this mess would be global debt forgiveness.
I say this because there is no way that we can continue to leverage future value for present gain without paying for it eventually.
I agree with much of what you say here. That part I would disagree on is that intertwined debt leads to robustness because there is a common goal not to fail. From an engineering point of view I point out there where there was one point of failure in a non-linked system, now there are many. The interest will indeed be in keeping the ship afloat, but the chance of disaster is greatly increased.
Your last sentence is one which I STRONGLY agree with!