Fiat Currency: Government Debt and Debasement

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1. Government Debt Interest is Inflation: When the government moves any Store of Value and Financial Capital through Fiat Currency out of the system, with a later promise of repayment, that working capital is moved around within the financial system. Essentially, for a while that amount of funds are tied-up and held in government controlled and stipulated spending.

   1. Limiting Available Currency Supply: Outside the most basic government spending purposes, the government spent funds are moved from value creation to value redistribution or preferred spending in contracts. This artificially limits the supply side of the Monetary Supply for a period of time. Money that would be available to consumer is not readily available and this then limits the short term Inflationary effects.

   2. Government Debt is Inflation: All government debt becomes Inflation. The government just prints more currency; thereafter, they expend value for what they perceive as "free". When the government takes an ever larger portion of the economic pie, there is less and less for people with the smallest remaining slice; this includes the poor, the marginalized, and the unempowered.

   3. Lower Income People Pay For All Inflation: Almost all of the true cost of Inflation comes out of the living standards of low income and lower-middle income workers and households. Anyone on minimum wage, who survives on tips for labor services, who saves, who marginally invests, or who is on a fixed income knows the disaster and cancer Inflation is on real income.

   4. Currency Debasement: Usually after a Financial Crisis, after paying interest, and repaying the principle funds the total amount of funds in the total Monetary Supply is greatly increased.  At the time of the crisis and immediately thereafter, inflation goes to the extreme in real Store of Value terms. Essentially, the government ties-up the funds for a period of time, then at the crash, all of the held funds, capital, and additional inflation are released at the same time.

   5. Debasement by Printing: When the government can no longer afford the interest and principle payments, the government releases a tsunami or avalanche of Monetary Supply. This where and when the Fiat Currency is debased and loses most of its value. Thereafter, the investor's Store of Value or capital is essentially stolen in terms of real value.

2. Inflation and Debasement: In the current economic environment, all economic activities and decisions are skewed through the economic manipulation of Inflationism and targeted inflation. With all governments using debt based financing, the controlling governments and their agencies either accidentally or intentionally enter Inflation or Hyperinflation to offset debt payments.

   1. Excessive Printing: Fiat Currency issuers continually Inflate, employ excessive Currency Printing, over leverage with Deficit Spending, or generally Debase their currency. XiXcoin^® may provide an Inverse Return to standard Fiat Currency. It should logically act as an excellent Financial Hedge against any impending Fiscal Meltdown or Financial Crisis. XiXcoin^® is designed to have an inverse Financial Correlation to government issued Fiat Currency. The many governments all continue to allow excessive Currency Access or too much monetary supply.

   2. Debt Crisis Reset: Governments borrow money until the last reasonable Investor can be found, thereafter they have a financial and fiscal crisis. The governments own the financial rules, structure, and the issuance of Fiat Currency. With this absolute power, they then complete some form of legal process to reset the government's power and control. In rarer cases illegal financial processes are used.

   3. Debasement: The continued use of an underlying and universal Debasement of economic value is thereby transferred or stolen from Savers and Investors. In most cases this process is slow, in some cases the process can very quickly happen.

   4. Wealth Transfer: Thereafter, the government debases or confiscates the investor's or general public's retained Store of Value without recourse. Generally, this can be simply described as a legalized Wealth Transfer of Capital from Lenders to governments. In all known cases, this process has Negative Consequences for Investors and especially for Consumers.

   5. Inflation Outcome: There are many methods used to reset government power, they include Nationalization, a Sovereign Debt Crisis, a period of Inflation or Hyperinflation, Bankruptcy, or by other means. Generally, the government's preferred method is Inflation; this heavily burdens the young and old the most. These groups generally are not the primary voters or social leaders; thereafter, those governments receive little or no true consequences for Inflationary action.

3. Where Failure Does Not Occur: Where outright Government Financial Failure does not occur, targeted inflation is typically heavily implemented. This policy slowly minimizes Investment Returns, increases the costs of all other goods and expenses, and artificially Decreases the Available Capital.

   1. Consumer Burden: As Governments implement monetary and fiscal Inflation, this introduces a double-taxation or economic burden for business activity and consumers. When there are higher interest rates, everyone must compete for access, control, and use of available capital. Paradoxically, both the Governments and individuals pay more in real-time income for borrowed capital with no advantage, gain, or benefit; it becomes a true lose-lose scenario.

   2. Hidden Tax: Targeted inflation is just a hidden tax; it is a double-hidden taxation in net effect.

4. Counter Balance and Offset: XiXcoin^® works to counter and offset the natural debasement of government issued Fiat Currency.

   1. XiXcoin^® Alternative: Transferable, Unique, and Alternative: XiXcoin^® is transferable. XiXcoin^® is mathematically unique to you and protects your value. XiXcoin^® is simply the best real alternative available and works for you and the economic system.

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