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The Evil that is Fiat Money

It used to be that Money was backed by valuables, often metal, frequently Gold. You could, in theory, go in to the local branch of the Central Bank, slap down a 10 Thaler note issued by them, and demand the equivalent value in gold from those reserves they hold. Held. No more since Nixon did his thing and unhitched the USD from its gold backing.

So what backs money now?

What ensures that the masses have confidence that this rather fancy printing on a quite sophisticated bit of paper actually has the value printed on its face? Why should people believe that a R100 note has that value?

It seems to me that the thing backing State-issued money is the exclusive power of the State to collect taxes. And the collection of taxes is backed by the State's monopoly on licensed violence: if you don't pay the State's taxes, the State will do a violence upon you. So we ended up with a Money System where the money is solely backed by violence.

Now if violence is the value at the very heart of your system of Money, well, then... what can you expect to see coming out of that system but violence and its nth-order consequences?