

293. The Fiat Standard Lecture 12: Fiat Cost-Benefit Analysis
Sep 30, 2025
Explore the sharp contrast between the minor benefits of fiat money and its immense costs, like wealth erosion and societal decay. Discover how inflation drives inequality, enriching the elites while impoverishing the poor. Learn about the destructive effects of fiat on saving, capital accumulation, and technological progress. The discussion also highlights how fiat systems distort economic behavior and enable state power, making war easier. Ultimately, a staggering $15 trillion annual cost is outlined, proving the overwhelming damage fiat does to civilization.
AI Snips
Chapters
Books
Transcript
Episode notes
Fiat's Limited Engineering Benefit
- Fiat's main engineering benefit is cutting the cost of moving gold by replacing physical transfer with data transfers.
- That convenience likely saves at most about 0.05% of world wealth per year.
Upper Bound On Gold Transport Savings
- Ammous estimates moving gold historically cost between 0.05% and 0.5% of gold's face value in fees.
- Using generous bounds, fiat at best saves about 0.05% of global wealth annually versus a gold economy.
Why CPI Understates True Inflation
- CPI understates inflation due to government bias, basket changes, and productivity-driven quality gains.
- Ammous argues money-supply growth is a better proxy for true inflation than CPI figures.