The dollar needs a new bonfire of the bills

This article discusses the historical and modern significance of burning bills of credit, a practice initiated in colonial America to instill value in fiat money. The Massachusetts colony was the first to introduce fiat money in 1690, with governments periodically burning the tax revenue in a public display to create scarcity and assure citizens of its worth. Fast forward to today, the Federal Reserve has effectively 'burned' $2.4 trillion of bank reserves since the pandemic to manage the money supply, albeit in a less public and dramatic fashion. Currently, amidst accumulating federal debt, concerns about fiat currency's credibility are rising as the Fed hints at a potential shift towards printing more money again. Unlike the colonial practice where bills represented repaid tax debts, today's monetary dynamics differ significantly. The article emphasizes the challenges in projecting monetary responsibility in an era of increasing debt, questioning the effectiveness of modern monetary policy compared to historical practices.

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