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...worthless??? Since fiat currency is by nature is only worth the paper it is printed on regardless of the bills denomination, is 'FAITH' all that gives fiat currency it's stated worth??? I must ask then at what point of faith, or lack of faith does a nations fiat currency go belly up?
The major world governments are in the process of destroying the value of the money their citizens hold. On Nov. 16, the Cato Institute held its annual monetary conference. Speakers included high-ranking officials from the Federal Reserve and monetary experts from the academy, think thanks and financial institutions. There was unanimous agreement that the world monetary system is in deep trouble, which is obvious to anyone who keeps up with the news. It is easier to observe the problem than to come up with a solution. Economists define money as having the following characteristics:
A unit of account, meaning that we can define the value of goods and services in it.
A medium of exchange, meaning that others will accept your money (e.g., the U.S. dollar) for goods and services.
A store of value, meaning that it keeps its intrinsic worth.
Since the beginning of the Federal Reserve System in 1914, the U.S. dollar has been a lousy store of value. It is now worth just one-twenty-second of what it was worth in 1913 and only less than one-quarter what it was worth as recently as in 1971, when the United States officially cut the last tie of the dollar to gold. Even so, many people around the world prefer to keep U.S. dollars because dollars have been less subject to inflation than most other major currencies. At the moment, the U.S. dollar is losing value at a rate of about 4 percent per year.
Inflation occurs when the central bank - the Fed in the United States or the European Central Bank in Europe - creates money at a faster rate than the supply of goods and services increases. Changes in the rate with which people spend money (referred to by economists as changes in the velocity of money) also affect inflation in the short run. If people hold on to money rather than spend it, inflation will fall and vice versa. Central banks can control the supply of money but not changes in velocity. In the United States, velocity has fallen because regulators have been increasing lending standards, so, in many cases, banks cannot even make what they think will be good loans. Also, regulators have been increasing the amount of reserves banks must hold. The result is that even though the Fed has been rapidly increasing the money supply, much of it is sitting in banks rather than being used for additional investment or consumption. Even so, the growth in the money supply has been greater than the growth in new goods and services; hence the current inflation.
Democracies have an inherent flaw in that many seek to use the political process to transfer wealth from some to others. This leads to counterproductive levels of government spending. People also dislike paying taxes. Therefore, the politicians tend to spend more than the tax revenue provides, and this excess spending is funded by the sale of government bonds. Under a classic gold standard, the sale of bonds by government was limited to the amount of gold the government held, plus the amount of gold that the bond buyers could reasonably expect the government would be able to buy from projected tax revenues if it became necessary.
Now, almost all government-produced money is a fiat currency, meaning there is no explicit backing for the currency, such as gold, other than the amount of real goods and services the government can coerce the citizens to pay through taxes or other means. The problem with fiat money is there is no limit to the amount of it the government can print. Accordingly, history demonstrates that fiat currencies eventually are debased through overprinting as the value is inflated away. Three years ago, the debasement of the currency in Zimbabwe reached a point where the government was printing 100-trillion-dollar - yes, trillion - bank notes, which were almost valueless. The citizens of Zimbabwe then converted their money as rapidly as possible into U.S. or other hard currencies, and the financial system in Zimbabwe collapsed.
More RAHN: Making money disappear - Washington Times
...worthless??? Since fiat currency is by nature is only worth the paper it is printed on regardless of the bills denomination, is 'FAITH' all that gives fiat currency it's stated worth??? I must ask then at what point of faith, or lack of faith does a nations fiat currency go belly up?
...worthless??? Since fiat currency is by nature is only worth the paper it is printed on regardless of the bills denomination, is 'FAITH' all that gives fiat currency it's stated worth??? I must ask then at what point of faith, or lack of faith does a nations fiat currency go belly up?
At what point does US citizenship become worthless?
...worthless??? Since fiat currency is by nature is only worth the paper it is printed on regardless of the bills denomination, is 'FAITH' all that gives fiat currency it's stated worth??? I must ask then at what point of faith, or lack of faith does a nations fiat currency go belly up?
Gold is intrinsically worthless. It's backed by nothing. Its value: purely speculative.
Dollars, on the other hand, will have value at least as long as you need them to pay your taxes.
Gold has intrinsic value.
fiat currency is by nature is only worth the paper it is printed on
...worthless??? Since fiat currency is by nature is only worth the paper it is printed on regardless of the bills denomination, is 'FAITH' all that gives fiat currency it's stated worth??? I must ask then at what point of faith, or lack of faith does a nations fiat currency go belly up?
Gold is intrinsically worthless. It's backed by nothing. Its value: purely speculative.
Dollars, on the other hand, will have value at least as long as you need them to pay your taxes.
ROFL! Exactly the opposite is the case. Gold has intrinsic value. It has value before it was ever used as money. Only an economic ignoramus would claim "its value is purely speculative." One can speculate in almost any commodity or product on the planet.
Paper money is worthless.
Gold has failed everywhere it's ever been tried anywhere in the world. So-called fiat money, on the other hand, has coincided with the rise of the richest, most successful countries the world has ever known.
When people realize unemployment is a purely artificial condition, that unnecessarily impoverishes everyone, which can be cured with a simple change in fiscal policy, we'll become even richer.
Brilliant. Another economist trained under duh no chillunz B giddin leff behine N shit.A true murkin....worthless??? Since fiat currency is by nature is only worth the paper it is printed on regardless of the bills denomination, is 'FAITH' all that gives fiat currency it's stated worth??? I must ask then at what point of faith, or lack of faith does a nations fiat currency go belly up?
Gold is intrinsically worthless. It's backed by nothing. Its value: purely speculative.
Dollars, on the other hand, will have value at least as long as you need them to pay your taxes.
fiat currency is by nature is only worth the paper it is printed on
I know you don't believe this. If you did, we ought to arrange for you to give me all your paper money in exchange for the value (paid in gold, I suppose) of the paper it is printed on.
Gold's value is largely speculative rather than based on some particular utility of the chemical element. Gold's price goes up in unstable times and down in stable times. For this and other reasons the price of gold fluctuates to a substantial degree (though of course fiat currencies undergo fluctuations as well). There's nothing more irrational about relying on people's confidence in the US government's ability to settle its debts than in people in a digital age continuing to use shiny rocks as currency.
...worthless??? Since fiat currency is by nature is only worth the paper it is printed on regardless of the bills denomination, is 'FAITH' all that gives fiat currency it's stated worth??? I must ask then at what point of faith, or lack of faith does a nations fiat currency go belly up?
...worthless??? Since fiat currency is by nature is only worth the paper it is printed on regardless of the bills denomination, is 'FAITH' all that gives fiat currency it's stated worth??? I must ask then at what point of faith, or lack of faith does a nations fiat currency go belly up?
Gold is intrinsically worthless. It's backed by nothing. Its value: purely speculative.
Dollars, on the other hand, will have value at least as long as you need them to pay your taxes.
ROFL! Exactly the opposite is the case. Gold has intrinsic value. It has value before it was ever used as money. Only an economic ignoramus would claim "its value is purely speculative." One can speculate in almost any commodity or product on the planet.
Paper money is worthless.
