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I think Gold was the 'global reserve currency' before the 20th century.
by dear 11y ago
I think Gold was the 'global reserve currency' before the 20th century.
- TheLogothete 11y agoYou are correct, currency and financial systems today are vastly different. That site seems to be pushing the "THE PETROLDOLLAR IS DYING ANY DAY NOW" agenda.
- kuschku 11y agoWell, because it is going to die. Holding assets in dollar makes little sense for most people on the planet, and when these people become richer, it makes sense they will use their own currencies. With them, their companies. With those, their governments. The EUR, despite current instability, and the Chinese Y have good chances.
- aianus 11y ago> Holding assets in dollar makes little sense for most people on the planet, and when these people become richer, it makes sense they will use their own currencies. You have a lot of misplaced faith in foreign central banks. A lot of foreigners absolutely do not trust their central banks, some even to the point of using the US dollar in their day-to-day transactions (Cambodia, various African nations, etc.) If you're in the position where you don't trust your own central bank, why would you trust the Bank of China instead of the Federal Reserve? It's been around a lot less time and does not have the political independence the Fed does. The dollar is going to be dominant for the rest of our lives IMO.
- kuschku 11y agoWell, for many people it makes sense to trust their own central bank more than a foreign one, especially when their nation is stable. No matter what happens, I can pay my taxes and get food at the bakery in Euro. Even if the Euro crashes. But if I hold Dollar, my government and bakery won’t take Dollar, so I’d have to convert – and lose or make money based on the exchange rate every time. It’s the same reason why bitcoin isn’t effectively used: If you have to exchange currencies every time you try to buy something, the currency is worthless to you. And for a billion chinese people, the Yuan is going to be the currency of choice. For 500 million europeans, the Euro is the currency of choice. But only the US and a handful of instable african or island nations use the Dollar, all combined still less people. For private holdings, the Dollar is going to lose power. (In fact, it has lost the majority of private holdings long ago)
- dools 11y agoGold was never a currency, it's a commodity.
- nradov 11y agoIs an electron a particle or a wave? From a trading standpoint gold sometimes acts like a currency and sometimes like a commodity. Does the distinction even matter?
- dools 11y agoVarious precious metals in the past have been used in coinage, and at times certain currency issuers have promised to exchange their currency for gold at a fixed rate, but at no time has gold been a currency. And yes the distinction matters -- goods do not buy goods. Goods buy money, money buys goods. Money, as a definition, should not be producable through the application of labour
- dear 11y agohttps://en.wikipedia.org/wiki/Gold_standard https://en.wikipedia.org/wiki/Gold_standard Origin "The gold specie standard arose from the widespread acceptance of gold as currency.[7] Various commodities have been used as money; typically, the one that loses the least value over time becomes the accepted form.[8] The use of gold as money began thousands of years ago in Asia Minor."
- dools 11y agoThe terminology is wrong in subtle bu important ways. Here's a great presentation on the origins of money and debt: http://m.youtube.com/watch?v=0zEbo8PIPSc http://m.youtube.com/watch?v=0zEbo8PIPSc and here is the analysis of nominalism vs. Metalism from Randall Wray who is one of the key proponents of modern monetary theory http://neweconomicperspectives.org/2011/08/mmp-blog-12-commodity-money-coins.html http://neweconomicperspectives.org/2011/08/mmp-blog-12-commo...