3 ms·
> fundamental means of valuation. Can you expound on the fundamental means of valuation for Fiat currency? It's my understanding that there is no fiat currency
by mr_spothawk 4y ago
> fundamental means of valuation.
Can you expound on the fundamental means of valuation for Fiat currency? It's my understanding that there is no fiat currency with any fundamental backing. I was pretty sure Khadaffi was killed for promoting an African currency backed by gold, in lieu of the USD hegemony.
> The value of fiat currency is ultimately tied to the economics of global, and therefore provides an objective means to value said currencies, both themselves and relative to other currencies.
This ^^ is not fundamental... this is relative.
- djur 4y agoYou can use it to pay taxes, which means you can live, work, and do business in a particular country.
- mr_spothawk 4y agoDo i understand correctly, then, that your point is: "The fundamental value of fiat currency is its capacity to pay taxes to a regional entity?"
- djur 4y agoThe fundamental value of fiat currency is that it is effectively a share of the productivity of a particular economy. The underlying driver of that value is that debts are denominated in and payable with the currency, and the underlying driver of that is that the government levies taxes.
- MrMan 4y agohttps://scholar.harvard.edu/files/haidar/files/jih-currency_valuation_and_ppp-published_version-2011_1.pdf https://scholar.harvard.edu/files/haidar/files/jih-currency_... just one take, but there are many ways to approach a fundamental valuation of a currency.