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0 pointsvarjag12y ago0 comments

> But we should not lose sight of the fact that interest rates are a highly psychological affair. Once trust in the ability to repay debt gets eroded things can get out of control very quickly. So we should be scared at least a little bit.

This is one thing an overstretched fiat currency has strikingly in common with Ponzi schemes.

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cantankerous12y ago

Same with any paper-based security as well. Any fiscal instrument can look like a Ponzi scheme if you pick the right angle.

varjagOP12y ago

That's why I wrote "overstretched". I'm not opposing the idea of fiat currency in general.

At essence of any Ponzi scheme lies debt that inherently can not be repaid, and public disclosure of that acts as tipping point.

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