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Musk Joins in Debate Around Fiat Currencies
Musk was replying to an earlier original tweet by zerohedge, a news commentator specializing in the economy. Zerohedge tweeted:
Are Fiat Currencies Fake?
The history of fiat currencies is millennia old. Still, the modern version of these national notes began in 1971 when the US government, under President Richard Nixon, ended the gold standard for the US Dollar, causing a momentous shift in global economics. Previously, all national currencies had to be backed by Gold.
With the Gold standard removed, many economists feared that governments around the world might go on a money-printing spree at some point in the future, potentially landing the economy and the average consumer in trouble due to rampant inflation.
Here is the USD’s purchasing power for the last 70 years:
 
Here is the USD/Gold graph during this time:
Both of these crucial graphs show that the USD’s purchasing power has dropped sharply since 1955, while Gold has risen exponentially against the greenback, particularly after the end of the gold standard in 1971. The main reason why the US reserve currency has suffered a lot over the past 5 decades, in particular, is that the central bank, also known as the Federal Reserve, can theoretically print as much money as it likes. The activity has particularly witnessed sharp spikes around the time the US entered major military escalations.
Instead of raising taxes or controlling spending, the US and other countries around the world have resorted to manipulating the value of their national currencies. The greenback in particular gets more coverage because it is the world’s reserve currency, and all the other fiats are tied to it.
Bitcoin – The Energy Currency
The manipulation of this fiat currency system is one of the main catalysts behind the growth of the Bitcoin revolution. It is an “energy currency,” as Elon Musk puts it, and it is impossible to fake energy because of the Proof of Work (PoW) mechanism.
Fiat currencies led by the USD are expected to continue to spiral downwards because of unsustainable government behavior. Users may look elsewhere to hedge against the menace of inflation, which is likely to rise over time.