The answer, of course, was that it depends what one means by survive. Carry on for many more decades under the same names of dollars, pounds, euros, and so on? Sure. Do so without losing purchasing power? Not a hope. Even inflation at 2% each year halves the value of your money in 36 years. And inflation at 2% for the long term is something of a distant dream at the moment. The Consumer Price Index (CPI) is down to 6.5% in the US and it will fall further from here, but it is very unlikely to settle at 2%, where most central banks still have their targets set.
When I recently went to talk to some school children about the nature of money, I brought props: a cowrie shell, a piece of play paper and a small handful of shredded dollar bills. Which of these, I asked, is money?
The point I wanted to make: It is all about belief. If everyone agrees something is money, it is indeed money. One particularly engaged child interrupted me just as I was getting going on the rai stones of Yap to ask: Can fiat currencies really survive? Not what you might expect from an 11-year-old.
