FIAT MONEY

[RR12]

Wondering what both conservatives and left wingers feel about the US Dollar and the idea of it being backed by nothing physical. ie gold/silver.

[Arnfinn Madsen]

Gold is not backed up in anything either. The world economy has become too large for any such connection to matter. That the government uses it for all transactions is a huge security.

[RR12]

Well gold only has like a 5000+ of being considered wealth and no currency has survied yet.

[Arnfinn Madsen]

The original idea was that you could at anytime (practical limitations of course) go and exchange your dollars into a fixed amount of gold and vice versa. With the amount of money in circulation today the entire gold collection of the U.S. treasury is just a drop in the ocean and thus would just provide false security.

Most central banks have therefore reduced their collection of gold, but it has been an "unwritten agreement" between major central banks to do it gradually to avoid a crash in the gold market.

As an example, last year our central bank got rid of all gold:

Gold sale (http://www.norgesbank.no/front/pressemelding/en/2004/2004-01-28T09-11-39.fgen.html)

[DVaut1]

The 1970s called, they want their debate back.

[The once and future king]

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The 1970s called, they want their debate back.

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POTM

where M= Millenium. Very very amusing.

On another note. Money can become just paper with pictures on. Gold dosnt suffer from this problem. However when/if money turns into mere paper because no one has confidence in it any more then gold is not going to be the most valuable thing you can posses.

Tins will be. Any collapse in the currency/money system will occur at the same time as a collapse in our equaly complex and bazantine food distribution system which is of course reliant on the above.

If there is no food on the shelves in downtown (Insert metropolis here) and no prospect of there being for several weeks, then one tin of humble baked beans will probably worth near its weight in gold if not more.

Thus is my pet name for social and economic collapse is :

"Day of the tin"

[QuadsOverQuads]

[ QUOTE ]
Wondering what both conservatives and left wingers feel about the US Dollar and the idea of it being backed by nothing physical. ie gold/silver.

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As another poster wrote: gold is not backed by anything either. The laws of supply and demand govern its exchange value just as much as they do for any commodity.


q/q

[bholdr]

If you really take the time to thiink about it, there is nothing in the world, even land, that has an intrinsic value that isn't dependant on a general consensus aggreeing to ownership and the belief that that thing is valuable, and also the need for a system to handle the exchange of goods and services.

If everyone in the world decides tommorow that gold is worth 10c a pound, well, it would be worth ten cents a pound. of course, market forces and the scarcity of useful recources would soon correct this... but if the people with the power (guns, mostly) decided that your money belonged to them, then geuss who owns what?

gold has been used for milennia as the worlds primary international monetary standard because it is rare, attractive, usefull, and it does not corrode.

so it isn't really gold, and never was, it is the general consensus that a thing is valuable, and that things are valuable in proportion to oone another, that holds ecomomies and monetary standards together, we've (since coming off the gold standard) simply admitted that.

Another intresting thing to think about is how 90% of the wealth in the U.S is digital... that is, abstract- with absolutely nothing, not even paper bills, backing it up... yet, the system works, because of consensus and the necessity of a monetary system to handle the exchange of goods and services.

[QuadsOverQuads]

[ QUOTE ]
Another intresting thing to think about is how 90% of the wealth in the U.S is digital... that is, abstract- with absolutely nothing, not even paper bills, backing it up... yet, the system works, because of consensus and the necessity of a monetary system to handle the exchange of goods and services.

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The whole concept of money and wealth has been an abstract creation all along, AFAIC. Strip away those abstractions (as you describe above), and what you're left with is the reality that the abstract illusion masks: a broad social order for the production of particular goods and services, and for justifying the subsequent distribution of the products of that labor. Numbers in digital bank accounts are the smoke and mirrors that keep us performing our role in that machine, rather than working to redesign it to better suit our needs.

As to your statement that land and other (survival) resources are not "wealth", I would both agree and disagree with that. On the one hand, they do not necessarily have any intrinsic exchange-value, because that is a socially ascribed concept which is, necessarily, subjective and contextually dependent. But on the other hand, they have a utility-value in that they provide a means for survival -- a place to build a house, a place to grow food, a place to sleep at night, etc. So, in that more fundamental sense, these are things of great value (which decorative metals like gold, ironically, are not).

Interesting to think about, anyway.


q/q