It was begun after America’s default on its obligations under the Bretton Woods gold exchange standard. Then again also, too, extracting more taxes from the already staggeringly overtaxed Americans - our forgotten men and and women - may yet prove harder than mining for crypto.Īll this, in any event, is, by our lights, a marker of the failure of our great experiment with truly fiat money. Hoffman that at least greenbacks are, in theory, backed by the ability of Congress to raise taxes. No less a sage on constitutional money than Edwin Vieira Jr., author of the magisterial “Pieces of Eight,” remarks to our Mr. That’s in contradistinction to fiat dollars that, since the 1970s, can somehow simply be called up by the Fed from the ether of pixels. Such crypto currencies are not infinite, after all, in that they have to be “mined,” often at a great cost in electricity. What recourse is there, though, for holders of Federal Reserve scrip? We have heard at least some of the crypto currencies defended as mimicking gold. There is some legal accountability in respect of FTX, in that civil litigation and even criminal prosecutions are at least being mooted. Which is worse? Save for its suddenness, the impact of the collapse in recent days in value of FTT is no more devastating to holders of it than the collapse in the past two generations in the value of the dollar has been on those who have held their wealth in dollars.
The collapse in the value of the dollar might have been more gradual, but since 1971 the greenback has shed 98 percent of its value, as has FTX’s token in the recent debacle. What makes the point so devastating right now is that while the collapse in the value of FTX tokens, known as FTT, is breathtaking, it is no more breathtaking than the collapse over the past 50 years in the value of our own government’s Federal Reserve Notes. After all, if America had a sound currency, one anchored in the classical monetary specie of gold or silver, we wouldn’t have so many young geniuses out there hawking crypto coins and tokens as units of account and mediums of exchange.
Hoffman’s dispatch in the Sun that marks the drama as a feature of our national experiment in fiat money. The best story so far on the collapse of FTX, at least in our view, is A.R.
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