What is a Dollar?

Discussion in 'Economy' started by JBeukema, Mar 18, 2011.

  1. JBeukema
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    JBeukema BANNED

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    How is it defined? Is the manufacture of these scraps of clothpaper- let alone their virtual form- remotely tied to any objective measure of the wealth they're supposed to represent?
     
  2. Toro
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    Toro Diamond Member

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    A dollar is an intangible unit of account, store of value and medium of exchange.
     
  3. JBeukema
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    So it's nothing at all? Who decides how much 'value' each one stores? It's not the average man buying and selling goods with them, since we have no way of knowing how many more dollars will be printed or magically typed into an account tomorrow. If we can't really know how rare a dollar is, can we know how valuable it is?

    Again, is their manufacture tied to any objective measure of the value they're supposed to represent? Is it tied to anything objective at all?
     
  4. zzzz
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    zzzz Just a regular American

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    Many variables, inflation, foreign exchange rates and so on. It used to be backed by the Gold standard but that was discontinued The value of the dollar has steadily declined to less than 5% of what is worth back in the 1700's. The only measurable worth today is to look at the foreign exchange rate and that changes every day.
     
  5. Toro
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    The dollar is not tied to anything tangible. But many things are intangible. Much of society and value is based on intangibles, such as trust and confidence. If we didn't have trust and confidence, then the economy would collapse. The dollar is similar. It would collapse if people lost confidence in it. What is the value of gold? Gold has no intrinsic value either. It only has value because people believe it has value. Much of economics is like that.
     
    Last edited: Mar 18, 2011
  6. Norman
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    Norman Gold Member

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    Dollar = whatever it happens to buy.

    - Bernanke.

    The one guy who was not supposed to say it got it right :cuckoo:
     
  7. editec
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    editec Mr. Forgot-it-All

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    The dollar, in indeed all specie, is an agreed upon representation of worth.

    It is nothing more than a mutually agreed-upon delusion of worth.

    And its worth depends entirely upon the mutually agreement.

    Collectively, the market decides its "value".

    The dollar is worth the aggregate TRUST the people have in it.
     
  8. RadiomanATL
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    RadiomanATL Senior Member

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    Fiddy cent.....twice
     
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  9. JBeukema
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    How can the market decide the value of something when its number can be suddenly increased at any time? When the Fed generates new money out of thin air, how can the market know how many 'dollars' are supposed to exist and account for monetary inflation when determining the value thereof?
     
  10. xotoxi
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    xotoxi Platinum Member

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    A dollar is defined as 100 pennies.

    And pennies are essentially worthless.
     

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