What Might Cause a Change in the Value of Fiat Money? The Fed

What Might Cause a Change in the Value of Fiat Money? Too many factors to mention

What Might Cause a Change in the Value of Fiat Money?

Updated June 18, 2023

Let’s begin the discussion by examining the factors that can lead to a change in the value of fiat money. Fiat money, a currency without the backing of a physical commodity like gold or silver, derives its status as legal tender from government declaration. However, its value is not fixed and can be influenced by various elements, affecting its purchasing power. This post will explore these different factors and their impact on the economy.

Subsequently, we will address the potential risks associated with fiat money and explore how to tackle the challenges of corrupt central banks and their equally repugnant allies, often called “bankster buddies.” These entities are modern-day blood-sucking parasites, which we will elaborate on as the discussion progresses.

Inflation and Deflation

One of the critical factors that can cause a change in the value of fiat money is inflation and deflation. Inflation occurs when there is an increase in the overall price level of goods and services, leading to a decrease in the purchasing power of money. On the other hand, deflation is the opposite, where there is a decrease in the overall price level, increasing the purchasing power of money.

Central banks are crucial in controlling inflation and deflation through monetary policy tools such as interest rates and money supply adjustments. However, central banks often abuse their power and only serve the interests of banks. They favour the banks during boom and bust cycles, leaving the average individual to bear the burden of economic downturns while the culprits responsible for the problems are bailed out and enriched.

Moreover, the Federal Reserve’s main objective seems to be intentionally fostering boom and bust cycles. They don’t control interest rates to help the average Joe; their only interest is to rob Peter and Paul to feed the bankster cartel.


 Interest Rates

Interest rates also have a significant impact on the value of fiat money. When interest rates are low, borrowing becomes cheaper, encouraging businesses and consumers to spend more. This increased spending stimulates economic growth but can also lead to inflationary pressures. Conversely, when interest rates are high, borrowing becomes more expensive, which can slow down economic activity and reduce inflationary pressures. Central banks closely monitor interest rates to manipulate the economy’s stability and influence the value of fiat money.

When they observe that the middle class and average Americans prosper, they claim that inflation is getting out of control and promptly begin raising rates to suppress the boom phase. Conversely, when the economic outlook appears bleak (the keyword being “appear”), they start to lower rates, providing their bankster friends with cheap money to snatch up all the assets they compelled mom-and-pop investors to sell. The Fed can be likened to the modern-day vampire, slowly draining its victims.

 Economic Growth

The overall state of the economy and its growth prospects can affect the value of fiat money. When an economy is experiencing robust growth, it attracts domestic and foreign investments, strengthening its currency’s value. On the other hand, economic downturns or recessions can decrease the value of fiat money as investors lose confidence in the economy’s prospects. Factors such as GDP growth, employment rates, and productivity levels all contribute to determining the value of fiat money.

Government Policies

Government policies and decisions can significantly impact the value of fiat money. For example, fiscal policies such as taxation, government spending, and budget deficits can influence the overall economic conditions and, consequently, the currency’s value. Similarly, political stability and the perception of a government’s ability to manage the economy can affect investor confidence and the importance of fiat money. Unpredictable or inconsistent government policies can lead to volatility in currency markets.

 Trade and Current Account Balances

A country’s trade balance, the difference between its exports and imports, and its current account balance, which includes trade in goods and services and investment income, can influence the value of its fiat money. A trade deficit, where imports exceed exports, can pressure the currency’s value downward. Conversely, a trade surplus, where exports exceed imports, can increase the currency’s value. These balances reflect the overall economic competitiveness of a country and impact the value of its fiat money.

Geopolitical Events

Geopolitical events such as wars, political conflicts, or significant international agreements can immediately impact the value of fiat money. Uncertainty surrounding these events can cause currency fluctuations as investors seek safe-haven assets or withdraw investments from specific regions. The perceived stability and trustworthiness of a country’s political environment can significantly influence the value of its fiat money.

Unveiling the Controversial Influence: Fiat Money as the Root of All Ills


The mother of all evils is fiat. Without Fiat, none of the above developments would have taken off. As money can be created out of thin air, those in the know have unlimited mechanisms to increase their wealth easily. The devastating boom and bust cycles the markets experience are not natural; they are created. Each cycle is pushed to the MAX to make more of an opportunity for those in the know-how. You can purchase all the main media outlets if you control the money. When you control the media and the money supply, you are the king of the hill; less than 10% of the populace is strong enough to resist falling for what they have been directed to see.


Unravelling the Influence: Manipulation and Direction of the Left and the Right

They are both being played, and none is the wiser.  This technique is used everywhere. The strategy employed is to provide the masses with two to three options to give them the illusion of choice, but all the choices lead to the same outcome, which is what they fail to see.  When one takes an extreme position, it does not matter whether you are swinging to the right or left; you are being controlled, and that person can’t see anything else besides the data they have been fed.

So, how does this all tie up? all those events we briefly mentioned are being used and will be used to polarise the crowd even more; the big players are masters when manipulating the herd. What is immoral today is moral tomorrow; what changed? The only thing that changed was the perception. So, if you program children young enough with the perception you want, you can make them accept almost anything as moral, which is what the public education system is about.  Remember, nothing is free, and what appears to be free usually costs you 10 times more. One wise man I knew would often use this sentence when anyone made references to free stuff. He would say I am not rich enough to accept free things.


Examining the Controversial Role of Fiat Money in Modern Civilization

As Fiat money is behind everything, and the money supply continues to go ballistic, we can expect levels of polarization to soar to unimaginable levels today. With an unlimited supply of money and a vast understanding of Mass psychology, there is almost nothing in place to stop the top players from pushing these trends to their limit. The only defence is not to allow your emotions to do the talking, sit down and imagine it’s reality TV minus the Boob tube.

We have gone on record for several years, stating that market crashes are nothing but buying opportunities. Today, we provided a brief glimpse into the reasoning behind this stance.  There is no way the Fed will allow the markets to crash and burn. They will create the illusion of a crash, and the crowd will react how they have been programmed to respond: dump the baby with the bathwater.

The conniving top players will come in and scoop everything.  What separates a correction from a crash? Your entry point is that the early bird gets the worm, and the late bird must contend with the bullet.  That is why groupthink psychology states that one should sell when the masses are euphoric and buy when the groups are panicking or uncertain.

 Take a look at these charts, and a pattern will start to emerge

currency in circulation

The shaded areas represent recessions, and a recession usually follows a disaster.  After each recession, the currency in circulation continued to soar.

What might cause a change in the value of fiat money? M2 money stock can do that

The same thing occurred with M1 money stock; after each recession, the M1 money stock surged even more. Look at the spike after the 2008 financial crisis.

What might cause a change in the value of fiat money? One is interest rates

Fiat Money: The Mother Of All Destructive Weapons

Moreover, the same can be said of the monetary base, but the move in this chart was explosive after 2008.

In 1790, the national debt was a minuscule $75.4 million; today, we add more than that every month. So, experts, mainly from the “hard money camp”, state that the masses will someday revolt. The only genuine part in that sentence is “one day”, but that day could be decades away from today because their perception has been altered. They believe that the dollar is as good as gold, and as long as they think that, Fiat has no chance of being unseated, and nothing is standing in the way of the national debt moving to $100 trillion.  If it could move from $75.4 million to almost $21 trillion without the masses revolting, the move from $20 trillion to $100 trillion is paltry by comparison.

So what stands out is that the principles of Pavlov have been used wonderfully against the American and now the world populace at large. The masses have accepted that if there is a crisis, the government will find a way to solve it. Indeed, they will find a way, but they will pass the bill onto the unsuspecting masses in the form of inflation and taxes; a double whammy for inflation is a silent tax.


Unending Fiat Money: Await These Conditions

Nations will continue to take on more debt; the US will lead the pack. To do this without interference from the masses, disasters and divisions will have to be created. Remember the saying conquer and divide or united we stand but divided we fall. The only ones falling will be the masses. History indicates that the ones that are least able to pay always pay for the lion’s share, and they do so for the disasters created by the people sending them the bill. There are no free meals, just illusions of free meals.

If the above premise is correct, the following conclusion is that the governments will never allow a repeat of the great depression. Today’s society will never accept hardships like that; they will string the people in charge of the nearest tree, but this is precisely the mindset the top players fostered in the guise of helping the masses that can fleece the living daylights out of them. Ultimately, this informs us that every market crash, no matter how bad or strong, will prove to be a buying opportunity, for it gives these players an excuse to ramp up the money supply.


Engineering a Crisis: Crafting a Solution for the Masses

You can only provide the masses with a solution if you manufacture a disaster that appears to be so terrible that the masses will accept conditions they would not have taken before the disaster because they have been led to believe the aftermath will be infinitely worse. It is a win-win situation for the top players; they get their cake and pie.  We do not fear stock market crashes because we understand the game plan and know that the masses will always be used as cannon fodder.

Having said that, jumping and buying stocks when the markets are crashing is not easy. We spent over a decade coming out with the trend indicator, and we have our custom indicators to inform us of when a trend change is close at hand or when the markets are exhibiting definite signs of a bottom.

Enhancing Your Chances in the Market: Simple Strategies for Success

We appreciate your interest in our article “What Might Cause a Change in the Value of Fiat Money?” Now, let’s conclude with suggestions on how individuals can enhance their chances of market success.

Take time to understand the main principles of Mass Psychology, as without that. You will give in to fear every time the market pulls back strongly. Understand that our first reaction is to flee when confronted with any danger; don’t fight that feeling; study it and understand it for what it is. When you learn it, you will see how wrong such emotions are, and in doing so, you will have moved to the stage where you will have the power to say yes or no when exposed to a similar situation.  Read history books; you do not have to learn from your experiences only; you can learn by studying other people’s reactions.

Once you have mastered that, find 2-3 technical indicators that appeal to you.  They must appeal to you; don’t just choose them because they sound fancy or are promoted as the best.  Once you find appealing technical indicators, study them and look for patterns.  Technical analysis is like art; beauty is in the eye of the beholder.  Use long-term charts, preferably weekly and monthly charts.


Combatting a Corrupt Fed: Effective Strategies for Dealing with Financial Challenges

In response to What Might Cause a Change in the Value of Fiat Money? The answer would revolve around eliminating the Fed.  However, as that is not possible, let’s focus on some strategies that help negate central bankers’ evil policies.

Contrarian investing can be a highly effective strategy for enhancing investment outcomes, but it hinges on comprehending mass psychology. Humans are inclined to engage in herd behaviour, wherein rising prices trigger greed, prompting people to rush into buying, and falling prices instigate fear, leading to panic selling. This herd mentality causes asset prices to oscillate between extreme overvaluation and undervaluation.

The contrarian investor seeks to take the opposing stance against the herd. When greed prevails and prices soar, the contrarian sells or abstains from investing. Conversely, when fear dominates and prices plummet, the contrarian seizes the opportunity to buy. This philosophy best encapsulates the saying, “Be fearful when others are greedy, and greedy when others are fearful.”

To execute this strategy, the contrarian investor must possess unwavering confidence in assessing an asset’s value. While the crowd may be heading in one direction, the contrarian exercises discipline and patience, waiting for the pendulum to swing back. Remarkable investors like Warren Buffett have achieved great success by adopting this contrarian approach.

Psychology and emotions are pivotal in shaping market trends and asset prices. The contrarian investor seeks to capitalize on the inevitable return to the mean by grasping mass psychology and its tendency to push prices to extremes. Although it demands patience and discipline, this approach can lead to exceptional returns that outperform the market in the long term. Ultimately, the contrarian philosophy epitomizes the timeless principle of buying low and selling high.

FAQ on What might cause a change in the value of fiat money?

Q: How does inflation and deflation impact the value of fiat money?
A: Inflation decreases the purchasing power of money by increasing overall price levels, while deflation increases the purchasing power by reducing price levels.

Q: What might cause a change in the value of fiat money?
A: Factors such as inflation, deflation, interest rates, economic growth, government policies, trade balances, and geopolitical events can all influence the value of fiat money.

Q: How do interest rates affect the value of fiat money?
A: Interest rates play a significant role. Low interest rates encourage spending and economic growth but can lead to inflationary pressures. High interest rates can slow down economic activity and reduce inflationary pressures.

Q: What role does economic growth play in the value of fiat money?
A: Robust economic growth attracts investments, strengthens a currency’s value, and vice versa during economic downturns or recessions.

Q: How do government policies impact the value of fiat money?

A: Government policies such as taxation, spending, and budget deficits can influence economic conditions and affect the value of fiat money. Political stability and government credibility also impact investor confidence.

Q: How do trade and current account balances affect fiat money’s value?
A: Trade deficits (imports exceeding exports) can decrease a currency’s value, while trade surpluses (exports exceeding imports) can increase its value. These balances reflect a country’s economic competitiveness.

Q: How do geopolitical events influence fiat money’s value?
A: Geopolitical events like wars, political conflicts, or international agreements can immediately impact the value of fiat money. Investor reactions to uncertainty and the perceived stability of a country’s political environment play a significant role.

Q: What is the perspective on fiat money’s role in modern civilization?
A: Fiat money is considered the root cause of various issues, with concerns raised about its unlimited creation, wealth manipulation, and potential for market manipulation.

Q: How are the left and right manipulated in society?

A: Both the left and right factions are directed and manipulated, creating an illusion of choice while leading to similar outcomes. The manipulation is done by controlling the information and data they receive.

Q: What drives the creation of crises and the solution provided to the masses?
A: Crises are manufactured to provide solutions, with the masses believing that the aftermath of these crises would be worse. This enables those in control to push their agendas and benefit from the resulting conditions.

Q: What options do average individuals have concerning fiat money?
A: Understanding the principles of mob psychology, studying history, and mastering personal emotions and reactions when confronted with market fluctuations. Additionally, finding appealing technical indicators and studying patterns can assist in making informed decisions.

Q: What might cause a change in the value of fiat money?
A: If we were to eliminate the Fed and fiat money, about 90% of humanity’s problems would likely end, and we wouldn’t need to delve into this topic extensively anymore. However, since most people have a solid attachment to fiat money, we’ll have to continue discussing the issue of What might cause a change in the value of fiat money.”


Originally published on March 2, 2019, this piece has been consistently updated, with the most recent update completed on June 18, 2023.

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