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"The thing about the Fed is that money represents real goods and services. " It doesn't and never has. There has never been a one to one match between money an
by neilwilson 9y ago
"The thing about the Fed is that money represents real goods and services. "
It doesn't and never has. There has never been a one to one match between money and stuff. Money is really the emodiment of a human promise, and promises don't always get fulfilled.
The one promise that does, is if you don't pony up the correct currency to pay your taxes you go to jail. And that is what drives a currency at root.
- 0x445442 9y ago"There has never been a one to one match between money and stuff." Depends on how you define money. In the case of hard assets like gold there is a one to one match because gold represents energy already spent.
- cirgue 9y agoPeople want gold not because it took energy to mine, but because other people also want gold. Gold is like any other currency system, except that the process that controls supply is basically stochastic (and there is a small industrial demand for the commodity itself, but this is negligible).
- smaddox 9y agoIf you define money as hard assets, you don't understand money. I suggest reading "Debt: the 5000 first years".
- wallace_f 9y agoNo, sorry. In every econ textbook exists the academic definition of money: store of value, unit of measure, medium of exchange. What is it an exchange of? What is it storing? What is it measuring? In other words, we use it to help us with exchanging, storing, and measuring real value. This way you don't have to exchange some lines of code for a cow, or store all your wealth in cheese. Maybe you are thinking that I am saying something about money not being a fiat currency, which wasn't the point here.