The entire global financial system is based on fiat money and the presumption that the money has “value” as a store of wealth. Nearly every action by the Fed over the past few years has led to the debasement of money. . . . I see the move to negative rates across the globe as a tipping point, one that will be damn hard to reverse once undertaken.
There’s been a lot of discussion on the internet for years now about the worth of money. Also a lot of discussion in print, although if you looked in the 1980s and even 1990s it mostly likely would have been fringe or conspiracy publications that talked about the real value of money, it’s a mind-bending concept if you think about it too much. 
The simplest way to look at money is that it’s a medium of exchange. That’s one of the things that Mom & Dad would occasionally tell my siblings and I — it’s just a medium of exchange. Part of that probably comes from being on a farm: numbers of a bank statement and green pieces of paper in your pocket aren’t what gets the fields plowed, the tractor fixed or the crop harvested . . . but those pieces of paper and numbers on a bank statement are what you can exchange to someone else to help make all those things happen.
A while back in one of Reggie Middleton‘s posts (or maybe it was one of his videos) he made a comment that he told his kids money was time. Or maybe it was convenience. Either way, you accumulate money with things that you do over time and then pay other people for things or actions that they create with their time. (My sincerest apologies to Middleton if I garbled that or misunderstood what he was saying.)
But there’s a whole other discussion about whether there’s any intrinsic worth to the thing you are using as a medium of exchange.
Let’s look at silver as an example.
U.S. quarters and dimes used to be made of silver, up until 1964. I haven’t seen them in change in years, but I ran across a few in college in pocket change, and I had a few that I got as gifts from older relatives. Even if tomorrow we completely changed to a different sort of monetary system and remnants of the old monetary system were no longer used, those coins still have some intrinsic worth, because they’re made of silver.
One step removed from that are silver certificates. You might run across them in an older relatives keepsakes, they look like a U.S. $1 or $5 dollar bill with a little bit different writing, and until 1968 the U.S. Treasury was obligated to exchange them for an equivalent amount of silver coins or silver bullion. (Now they’re just collector’s items and otherwise are treated like regular $1 or $5 bills.) So even though the silver certificate itself had no intrinsic worth, it was directly tied to something which did and there was guarantee from the U.S. government they would exchange it for that item with intrinsic worth upon asking.
Even as late as the 1990s, there was a Middle-Eastern country which had a strip of platinum in all the currency they issued, my older cousin Mike was over there for the first Gulf War and sent back a couple bills to members of the family.
So what is fiat money?
Which brings us to fiat money, which is where there’s no direct tie to commodities, gold, silver, or anything else. A U.S. $5 bill is worth USD$5 because the U.S. government says it is, and I can buy a cup of tea or coffee or maybe a cookie with it because the merchant I’m dealing with is confident that everyone they deal with will think that U.S. $5 bill is worth USD$5.
Why? Because . . . well, because the U.S. government says it is. Fiat is Latin for “it shall be” or “let it be done”, and that’s what fiat money is — it has worth because the U.S. government says it does, and everyone agrees.
Most of the world’s currencies are fiat currencies now. 
But what happens when people no longer believe in the worth of that currency? When they are worried about whether their local tea shop will accept that U.S. $5 bill, when they are worried the medium of exchange will no longer be accepted in exchange for anything else?
That U.S. $5 bill I keep talking about will slowly buy less and less over time anyway due to inflation. But there are things you hopefully can invest in which will grow your money faster than inflation.
If you see discussions about “negative real interest rates”, what that’s talking about is times when government bonds and bank deposits pay a lower interest rate than the rate of inflation, so if you leave your money in bonds or a bank deposit, you’re actually losing value over time. 
Human nature being what it is, if government bonds and bank deposits pay some sort of positive interest rate, usually it’s only the people who like reading the Wall Street Journal and Barron’s for relaxation who will really be looking into whether those bond / bank deposit interest rates are higher or lower than the actual or official inflation rates.
But, if the government bonds themselves are explicitly stated to have a negative interest rate — the government is explicitly saying “You give us X amount of money today, and we’ll return something less than X amount to you sometime in the future, and the only reason we can get away with that is so money of you see our guaranteed lesser amount of X as still being a better bet than other investments which you think will probably make you lose even more” — well, that starts raising a lot of really fundamental questions about where the value of money actually comes from.
And while the U.S. government hasn’t (yet) issued negative interest rate bonds, there are a couple European countries which are issuing them right now.
If you follow the link to Krasting’s full post, you’ll see a brief discussion about the various options he thinks the U.S. Treasury & Federal Reserve are looking at right now. It’s an interesting article.
As a side note, here’s an unredacted version of the quote I opened this post with:
The entire global financial system is based on fiat money and the presumption that the money has “value” as a store of wealth. Nearly every action by the Fed over the past few years has led to the debasement of money. In the final stage, the issuers of money debase it to the point where it is no longer desirable to hold. I see the move to negative rates across the globe as a tipping point, one that will be damn hard to reverse once undertaken.
I left out that second sentence in my opening quote, there are certain phrases or words you can use that will make people tune you out because as soon as they see that word or phrase they think “Oh God, this is going to be something long and technical and really boring and maybe even get into a screechy tirade about politics and I don’t want to deal with any of that right now.” I suspect “the Fed” and “debasement of money” appearing in the same sentence would likely be one of those phrases. So I left it out in the hope more people would actually read a little ways into this post rather than just gloss over it.
 Sort of like quantum mechanics where everything being both a particle and a wave starts becoming a bit weird if you think about it too much and start contemplating your keyboard as being a collection of probabilistic waves.
 A lot of countries were on some version of a gold standard up until the 1970s, and honestly I haven’t studied the subject well enough to be confident I won’t completely mess up whatever I write, so just look up “gold standard” or “Bretton Woods” if you want more information.
 And the discussion of real inflation rates versus stated inflation rates, and different ways of calculating inflation, is also a huge separate topic I’m not going to get into right now.