by Thorsten Polleit
Mises.org
The unbacked paper money system is an economically and socially destructive system—with far-reaching and harmful economic and social consequences beyond what most people would imagine. Fiat money is inflationary; it benefits some at the expense of many others; it causes boom-and-bust cycles; it corrupts the morality of society; it will ultimately end in a major bust; and it leads to overindebtedness.
The Institute of International Finance (IIF) estimates that global debt climbed to $277 trillion by the end of 2020, amounting to a staggering 365 percent of world gross domestic product (GDP). As the graph below shows, global debt versus GDP has risen in recent years, suggesting that the increase in debt has outpaced the rise in GDP. This buildup of excessive debt, the path to overindebtedness, results from an unbacked paper money system.