For some more background info on the underlying problems of the fiat money system have a read of this:
Confidence Is Leaving the Fiat Money System
Were it not for ever greater increases in central bank money and the market expectation that governments are about to make taxpayers shoulder commercial banks’ huge losses, the fiat money systems would presumably collapse right away.
Under fractional-reserve banking, banks keep just a fraction of their immediate payment obligations (basically sight deposits) in the form of cash. As a consequence, they cannot meet all their payment obligations should customers whish to withdraw their sight deposits all at once.
However, banks enjoy a privilege granted by the government. Central banks, the holders of the money supply monopoly, can provide banks with whatever amount of cash is needed. With central banks acting as lender of last resort, the chances for a bank run, initiated by private savers, have been greatly reduced.
When central banks form an international cartel — with the purpose of preserving the fiat-money system — domestic banks wouldn’t default, even if their payment obligations are denominated in foreign currency (which the national central bank cannot produce): central banks would simply lend money to each other.
So who are the major players in this internetional cartel... democratically elected representatives responsive to the needs of the worlds population... no i thought not. Seems like we have two possible outcomes: Total Domination or Hyperinflation.