What is a Dollar?

[JBeukema]

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?

 

[Toro]

A dollar is an intangible unit of account, store of value and medium of exchange.

 

[JBeukema]

A dollar is an intangible unit of account, store of value and medium of exchange.

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?

 

[zzzz]

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.

 

[Toro]

A dollar is an intangible unit of account, store of value and medium of exchange.

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?

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.

 

[Norman]

Dollar = whatever it happens to buy.

- Bernanke.

The one guy who was not supposed to say it got it right

 

[editec]

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.

So it's nothing at all? Who decides how much 'value' each one stores?

Collectively, the market decides its "value".

The dollar is worth the aggregate TRUST the people have in it.

 

[RadiomanATL]

Fiddy cent.....twice

 

[JBeukema]

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?

 

[xotoxi]

A dollar is defined as 100 pennies.

And pennies are essentially worthless.

 

[Norman]

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?

Well, it is all speculation. The market THRUSTS the fed. Currently the dollar is worth whatever it buys - but that may drop in the future.

If you don't thrust the fed you abandon your dollars.

If the chairman of the fed says dollar is whatever it happens to buy it's time to abandon them.

The market can know how many dollars fed "prints" as it's official info (or is it? - it should be - here in europe it is) anyway there is at least some sort of figure at shadowstats, if not officlal. Also the market is not concerned how much they print but how much the expected value of the dollar is. The market of course doesn't know what the value of the dollar is in the future any more than it knows what's the price of old chair in the future. It's speculation.

 

[JBeukema]

At first, I thought you meant 'trust', but then you said 'thrust' again

So I've no idea what you mean

 

[editec]

How can the market decide the value of something when its number can be suddenly increased at any time?

I didn't say they would necessarily be RIGHT, did I?

In fact the working class is usually the LAST to know the TRUE value of their dollars.

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?

Assuming that the FED reports the change in money supply, those who have the time, interest and understanding CAN AND DO value or devalue the currency in question.

But most of us?

We're hosed, sport.

We don't know the value until we test that value on the market.

 

[Norman]

At first, I thought you meant 'trust', but then you said 'thrust' again

So I've no idea what you mean

Yeah I mean trust... Some epic typoing....

 

[8537]

anyone who is concerned that their dollars are useless and of no value, please PM me. I'll be happy to come to your aid by exchanging your silly, useless paper money for small pieces of metal stamped with a nice picture of Old Abe.

 

[JBeukema]

anyone who is concerned that their dollars are useless and of no value, please PM me. I'll be happy to come to your aid by exchanging your silly, useless paper money for small pieces of metal stamped with a nice picture of Old Abe.

1000 copper piece per slip of green clothpaper with a 1 printed on it?

 

[Mini 14]

Loughner is obsessed with this same quandary.

We should go back to the gold/silver standard.

 

[JBeukema]

We should go back to the gold/silver standard.

That'd be fine if we still had 60+% of the world's gold and a trade surplus

The reasons for the acceptance of the US dollar as the 'anchor currency' was because American soil was largely untouched by destruction from the war leaving most of her manufacturing capacity intact, the arrival of the atomic bomb, and that US vaults held an estimated 65% of the world's gold reserves.
By the late 1960's, nations around the world became increasingly concerned about the ability of the United States to keep the price of gold at US$35 given America's involvement in the Vietnam War and spiralling costs for Lyndon B. Johnson's Great Society programs.
By 1970, the US gold reserve had shrunk to 16% of the world total and the US trade balance swung negative for the first time.

http://dollardaze.org/blog/posts/2008/June/27/1/US_Dollar.jpg

 

[emilynghiem]

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?

It's a promissory note, based on faith in the US government and federal reserve to back the debt it represents.

I believe that all the massive misspending and corruption/abuses at taxpayers' expense should be traced and charged back to the wrongdoers instead of adding it the public tab.
But that would actually create productive jobs for lawyers to go after these debt collections and damages, instead of legal and legislative bureaucracy that gets them paid for nothing.

If you want to invest in localized currency, that is labor-based:
Ithaca HOURs Online: Home Page
http://www.ithacahours.org

I would recommend issuing reparations notes against debts and damages, incurred at public expense, of sites of national historic and environmental treasures destroyed by corporate abuses of development and tax-paid handouts and bailouts to take over land.

Similar to federal reserve notes, that are issued against debt, these notes would be issued against the value of the land being restored, where the people who invest labor or money to back the notes would claim shares in the property.

Every state could select different sites for restoration, and issue bonds against the value to fund jobs in education and restoration work, including construction of schools and hospitals in areas devastated by crime and corruption, funded as restitution owed the public. If the wrongdoers do not pay their debts they incurred, then whoever does invest the money or labor to back the debts would claim shares of the land and property restored.

 

[B. Kidd]

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?

Loan me 10,000 of them and I'll tell you. I'll pay you back in a month.....