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Exactly why I mentioned monetary -exchange-, not backing. The value is backed by a countries GDP, which helps determine its value/worth. If I accept (exchange)
by prox 6y ago
Exactly why I mentioned monetary -exchange-, not backing. The value is backed by a countries GDP, which helps determine its value/worth. If I accept (exchange) a Dollar for a Euro, I know it is backed up by a certain economic output, status and its national banks. I think that’s a difference there?
- rich_sasha 6y agoIt’s a bit different I think, you can’t explicitly exchange a dollar for a (tiny) fraction of US GDP. You can buy some product of it with it, but eg if US continues to grow at 2% per year, you can’t latch on to that. By contrast, shares have this property, to some extent, because in the long run they either pay dividends, or are returned for capital. A share literally owns you a bit of the company’s economy. Give or take non voting shares, non dividend paying shares etc.