They all produced something and extended credit to the fellow towns folk that they could trust. Everything breaks down when you have to depend on a (((third party))) for credit. That third party claims interest on every transaction, so when the money got back to the hotel it would only be $40 dollars and problems would occur. Credit and fiat currency isn't the problem, interest is.

In a proper barter system I go to a mechanic and get my tractor fixed in exchange for giving the mechanic some amount of food at harvest time. As long as we trust each other, everyone's labor is converted into useful outcomes. Break down that trust with things like illegal immigration and forced hiring of unqualified "minorities". Now you can't trust anyone and must depend on a third party that takes it's pound of flesh out of every transaction.

What do you mean no one produced nothing and no one earned anything? This is pure stupidity. It's right there in the fucking story:

• The butcher produced meat for the hotelier
• The pig farmer produced a pig for the butcher
• The feed supplier produced feed for the pig farmer
• The prostitute provided sex to the feed supplier
• The hotel owner provided a room to the prostitute

Money is simply a system of value, and nothing else. All this story "proves" is that everyone's goods and services they had provided to each other was of equal value.

Please leave economics to the professionals.

Hotel owner is out the 50 bucks the hooker paid him.

That has literally nothing to do with "fake fiat currency" and is entirely (((debt))) caused.

Debts paid with stolen money.

This is not an example of fiat currency. This is an example of accounting / basic math. Everyone in this scenario is both owed and owes the same amount. Of course it all cancels out.

A fiat currency example would be if the hotel owner were lending money and making interest off the contents of the safe that were not his.

if it had been a gold coin, the story would be the same.

Excellent post.

:Saved