2026 - fiat fiasco

Money makes the world go round! But what exactly is money? In this modern western world, more than any other culture or society throughout history, money is essential for daily life. In other times and places, one could barter, grow one’s own food and trade via other forms of exchange but no longer.

But how many of us have ever really stopped to think about what money really is? Moreover, there are many psychological misconceptions and mind traps around money. For much of my life I have been an entrepreneur, an employer, a business consultant and an economist, so I have personally dealt with many people and their attitudes towards money. And most of them are erroneous and misleading. It seems we all have an illusion and a ‘fog’ around money.

Money has 3 essential qualities or functions: a store of value, a medium of exchange and a measure of price or value. Indeed, in this highly financialised socioeconomic system, money has become a defacto measure of personal stature with many people measuring their own ‘worth’ in terms of dollars and material possessions.

This is also highly erroneous and misleading thinking leading to much emotional stress and mental anguish. Your ‘value’ as a human being is inherent within your spiritual nature and who you are and has absolutely nothing to do with your financial wealth. Quite to the contrary, some of the ‘poorest’ and unhappiest people hold substantial assets.

Money is in fact a vehicle that facilitates transaction. It enables us to trade and to determine if we want to buy or sell dependent upon price. It enables us to compare competing products and also to determine the opportunity cost of something because we need to part with our dollars to purchase and our time to earn.

But what happens when that measure or ‘yardstick’ becomes untrustworthy or meaningless? What happens when your ruler is rubbery or your numbers too flexible? Measures only make sense when the instrument of measurement holds its consistency over time and space.

A medium of exchange only works when there is a consensus or agreement of value and trust. When that trust breaks down an economy with its social structure collapses. Every single socioeconomic system that has experienced hyper-inflation has eventually collapsed with the necessity of rebuilding social cohesion, trust and commerce.

The ability to trade lies at the heart of any great society. And that ability is 100% dependent upon trust and confidence in the currency. Once that confidence falters the fabric tears very quickly and social strife and chaos reign. Peace and prosperity are intricately linked.

In 2026, we are witnessing that descent into monetary chaos and the impending collapse of the western financial fiat system. All western currencies are fiat currencies which means they are not backed by any gold reserves but only by faith and confidence in the government that issues that currency. This faith in turn is based upon fiscal responsibility and prudent monetary policy.

As in any interpersonal relationship, once that trust is broken the relationship disintegrates rather quickly. Reckless money printing, ultra loose fiscal and monetary policy, runaway budget deficits and financial repression or artificially low interest rates all debase the currency and erode confidence in the sovereign issuer.

This is now a global phenomenon with nearly all sovereign states facing bankruptcy. Last year, 2025, gold went up by 67% and silver a staggering 140%. So far this month alone, January 2026, silver has gone up another 45%. Total global debt currently stands at $US 318 trillion which is 328% of global GDP. De-dollarisation and de-fiatisation are now facts of life. When faith and confidence in currency tumbles people turn to precious metals as a hedge, safeguard and insurance policy. Governments can no longer be trusted. Money printing always leads to inflation and currency debasement.

The ruler becomes rubbery. Currency loses value. Purchasing power erodes. Social cohesion descends into social chaos. Faith, confidence and trust are replaced by uncertainly and lawlessness. The wheel of history turns.