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Money is the most important medium of exchange in our civilization. Without money, a prosperous and efficient society that embraces technological progress is virtually impossible.

Fiat (Latin for “let there be,” “let it come into being”) means that today’s central banks can multiply their currencies at will. This has both advantages and disadvantages.

J.P. Morgan, one of the major shareholders of the Federal Reserve (FED) in the U.S., said himself: “Fiat money is just debt. Gold is money.”

Simply put, the advantage is immediate liquidity without the need for concrete backing by, for example, a base currency (gold, Bitcoin)—as is the case today. To benefit from this, however, one must have unconditional trust in the system.

The disadvantage is permanent devaluation, for example, when loans are no longer repaid. Numerous examples of this can be found in government-financed debt-ridden companies, government bonds, and national debt. To date, the U.S. dollar has lost 99 percent of its value, and the euro has lost about 75 percent since its inception in 2002.

The myth and promise of central banks—that wages and salaries would automatically rise with inflation—has long been outdated, scientifically disproved, and even admitted by the central banks themselves, and thus belongs in the realm of fables. The notion of trust in fiat money is certainly open to question.