“Fiat is hopeless”

I did not expect the development of a new third political party over the Fourth of July weekend, but with Elon Musk you truly never know what might happen.

I have not spent time digging into exactly what he is proposing, but one tweet caught my eye: “Fiat is hopeless”.

This is a train that I have been on for a while now.

First, what is fiat? Fiat is government issued money like the dollar or the euro or yen. Countries have their own money. But the problem with fiat is that it is not backed by anything. It used to be that money was backed by gold. You could literally exchange a US dollar for equivalent amounts of gold. That practice was suspended under FDR in 1933. We finally left the gold standard for good in 1971 under Nixon. Now the dollar is backed only by the collective public trust in the issuing government.

The question becomes, then, can we trust those who issue our money?

Trust in most institutions, broadly speaking, is at its lows.

And why should we not be questioning the current monetary system? The only thing that I trust to be true is that those who are on the top and already rich will continue to make themselves wealthy.

I am not the only one who has noticed this or feels this way. New York City is looking to elect a socialist as mayor because he wants no more billionaires and a massive redistribution of wealth.

Socialism is not the answer. But a fundamental change to fiat is the answer. Fix the money and you will fix the playing field, making the rules of the game more understandable and free.

Bitcoin is this fundamental change.

Bitcoin returns us to a gold standard in a new generation, because Bitcoin is better than gold. It is backed by energy and mathematics. It is secure, storable, transferrable, transmutable.

Best of all, there are 21 million Bitcoin ever. Our current system of fiat is inflationary, slowly (or quickly) eating away the purchasing power of those who hold the fiat currency.

Why is someone like Elon Musk open to Bitcoin replacing the Dollar? Because he does not like the Big Beautiful Bill adding 5 trillion in debt to an already insurmountable debt situation in the US. Elon has seen and showed that politicians are not interested in balancing the budget, but rather grabbing as much money as they can while they can for themselves and for their constituents.

Politicians would not be able to do this if the foundation of our monetary policy was fixed on something with a stable supply like Bitcoin.

The beauty of Bitcoin is that it does not need a political system to back it. It is a revolution in itself and when enough people participate in the Bitcoin economy it can reset finical relations in the dollar. I saw this happen first hand. I began to put all of my savings into Bitcoin and when the prices of everything began to inflate post-COVID, so did Bitcoin. Bitcoin is an asset that closely tracks the money supply. As governments print more money, that money is tracked in the price of Bitcoin.

In other words, saving your monetary value in Bitcoin allows you to hold its value even as the government inflates the value of the Dollar away.

Maybe all this doesn’t convince you the value of Bitcoin. That is fine. But I hope you see that there is a coming financial revolution. Bitcoin is trying to pave one way. New York and the socialists are trying to pave another. Maybe there is yet another route. But regardless, I think that our finical system is reaching a breaking point.

Why should you be thinking about this? Michael Saylor said it best: you spend all your life working to earn money, you should spend at least a fraction of that time thinking about how best to preserve that wealth.

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