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And that is exactly what you don't want in "money" in a functional economy. You don't want deflation. You want price stability. So the more it gets artificiall
by rulum 9y ago
And that is exactly what you don't want in "money" in a functional economy. You don't want deflation. You want price stability.
So the more it gets artificially valuable, the more useless it becomes for its intended purpose.
- dlwdlw 9y agoIt is valuable as a store of value though. Either pure like gold, or tied to something more like assets. USD is a bit strange because it is both a store of value used by many countries as well as a currency. there is an implicit peg to oil though. So the the price of oil is something fairly important to the US.
- gamblor956 9y agoThe USD is a currency. Due to its stability, it is also used as a store of value by foreign countries. Oil is pegged to the dollar. The price of oil is relevant because of its effects on prices, not the dollar.
- dragonwriter 9y ago> Oil is pegged to the dollar. Oil producers may target a dollar price and trade in dollars, but oil is not pegged (that is: trading with a fixed exchange rate) to the dollar.