With the economy in countries all over the world in such turmoil, the value of every world currency is either decreasing or predicted to decrease in the coming years. Yet even if the perceived value of the world’s fiat currencies is cut in half by inflation, none of the paper money we’re currently using has any real, intrinsic value.
Historically, every 40 to 50 years the reigning monetary system fails and has to be retooled. The last time that happened was 1971 when Nixon repealed the gold standard and made the world’s economy run purely on people’s faith in their governments. Before that, it was the inception of the Federal Reserve in 1913.
According to a study done on 775 fiat currencies throughout history, there is no historical precedence for a fiat currency that has succeeded in holding its value. 20% failed through hyperinflation, 21% were destroyed by war, 12% destroyed by independence, 24% were monetarily reformed, and 23% are still in circulation and approaching one of the other outcomes.
The average life expectancy for a fiat currency is 27 years, with the shortest life-span being one month. Founded in 1694, the British Pound Sterling is the oldest fiat currency in existence. At a ripe old age of 317 years it must be considered a highly successful fiat currency. However, success is relative. The British pound was defined as 12 ounces of silver, so it's worth less than 1/200 or 0.5% of its original value. In other words, the most successful long standing currency in existence has lost 99.5% of its value.
Given the undeniable track record of currencies, it is clear that on a long enough timeline the survival rate of all fiat currencies drops to zero.
taken by the Germans to end their hyperinflation back in the 1920s, coming up with the equivalent of the Rentenmark – a dollar that is loosely linked to some basket of commodities and financial instruments. It won’t be convertible because it would be impossible for bank tellers to exchange your dollar for a cup of oil, and a coupon off of a bond, and a chip of gold, or whatever makes up the basket – yet it might restore some semblance of confidence in the currency. That’s one option. Another is that some government decides to make its currency convertible into precious metals. Simply, at this point we can’t know what will replace the current monetary system, or when. All we can know is that the status quo cannot and so will not survive this crisis.
Regardless, between now and the point in time where the Fed throws in the towel on today’s fiat monetary system, you would have to be naïve in the extreme not to expect volatility, uncertainty, and wholesale financial dislocations.”
As we can see, all it can take for hyperinflation to happen is one seriously greedy politician getting his hands into the Federal Reserve and the printing press.