[quote=Arraya]Faith based systems don’t last to long when people lose faith.
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Every system is faith based. Every single one of them. Even the gold standard. You do realize that we had major depressions during the 19th century before our current fiat system and even without huge amounts of debt relative to GDP, right? If folks stop believing in aggregate that the next 10 years is going to be better than the last 10 – even if just marginally better – then things go south – gold standard, fiat system, cigarette bartering, whatever. That’s just the way economies work within the context of the psychology of the masses.
All you’re really saying is that every system of commerce since credit was invented had an enormous element of faith intertwined into it. Otherwise, credit wouldn’t exist. That’s a blinding glimpse of the obvious.
