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> looking at the ledger used by governments to keep score amongst themselves is quite telling. how does one do this? do you mean looking at the currency exchn

> looking at the ledger used by governments to keep score amongst themselves is quite telling. how does one do this? do you mean looking at the currency exchnage market?

jkhdigital 7y ago
Yes, currency reserves are the ledger. This includes a variety of things, both hard currency (gold) and claims on foreign sovereign debt. The US Dollar has emerged as the dominant component here, but that state of affairs is not guaranteed to last forever, and when it changes it could be quite tumultuous.
- RobertoG 7y ago
  Currency reserves are not the ledger. The ledger of the monetary system is, not surprisingly, the electronic ledger in the central bank that interconnect all the private banks. The private banks have their own ledger, and, in that sense, they can create money. But if they have to operate outside their ledge, they need a "more real" money. That money, it's the ledger in the central bank (and cash). This "more real money" is called "bank reserves" (not to confuse with reserves of gold or foreign currencies that are a different thing).
  - jotakami 7y ago
    I’m talking about the ledger between sovereign governments, you’re talking about the ledger within a single sovereign country. Two completely different things.
    - RobertoG 7y ago
      The ledger between sovereign governments is the BIS: https://en.wikipedia.org/wiki/Bank_for_International_Settlements https://en.wikipedia.org/wiki/Bank_for_International_Settlem...
      - jotakami 7y ago
        Not exactly. The BIS is owned by 55 central banks... which implies that it is subordinate to them, not the other way around. It is a way for banks to lend reserves to one another, basically. So it is a ledger, for sure, but a debt-based on that exists only for easy transaction settlement and not as the “scorecard” of wealth that a true ledger would imply.
- naringas 7y ago
  are there any modern (fiat) currencies still backed by gold?

> looking at the ledger used by governments to keep score amongst themselves is quite telling. how does one do this? do you mean looking at the currency exchnage market?

jkhdigital 7y ago

Yes, currency reserves are the ledger. This includes a variety of things, both hard currency (gold) and claims on foreign sovereign debt. The US Dollar has emerged as the dominant component here, but that state of affairs is not guaranteed to last forever, and when it changes it could be quite tumultuous.

RobertoG 7y ago
Currency reserves are not the ledger. The ledger of the monetary system is, not surprisingly, the electronic ledger in the central bank that interconnect all the private banks. The private banks have their own ledger, and, in that sense, they can create money. But if they have to operate outside their ledge, they need a "more real" money. That money, it's the ledger in the central bank (and cash). This "more real money" is called "bank reserves" (not to confuse with reserves of gold or foreign currencies that are a different thing).
- jotakami 7y ago
  I’m talking about the ledger between sovereign governments, you’re talking about the ledger within a single sovereign country. Two completely different things.
  - RobertoG 7y ago
    The ledger between sovereign governments is the BIS: https://en.wikipedia.org/wiki/Bank_for_International_Settlements https://en.wikipedia.org/wiki/Bank_for_International_Settlem...
    - jotakami 7y ago
      Not exactly. The BIS is owned by 55 central banks... which implies that it is subordinate to them, not the other way around. It is a way for banks to lend reserves to one another, basically. So it is a ledger, for sure, but a debt-based on that exists only for easy transaction settlement and not as the “scorecard” of wealth that a true ledger would imply.
naringas 7y ago
are there any modern (fiat) currencies still backed by gold?