Worth is based on scarcity, need and agreement in peculiar ways. Some people can agree to trade an asset while some don't. Before fiat, it was fiat pegged to th

Worth is based on scarcity, need and agreement in peculiar ways. Some people can agree to trade an asset while some don't. Before fiat, it was fiat pegged to the dollar, fiat supported by gold, gold, silver, various metals. There was not enough silver to support the habits and economy of the British so even opium was used as a currency. And "we" switched to gold because there was not enough silver to support the economic growth (and then fiat). (And here is a random web write-up:https://www.abcbullion.com.au/investor-centre/blog/Silver-and-Opium https://www.abcbullion.com.au/investor-centre/blog/Silver-an....) The real irony is when central banks try to make their own digital currencies, to more effectively try the past negative interest rate experiment among many other things like tracking. (Japan tried it as an interbank borrowing rate but had the opposite results.)(China is planning to do all that, and the Fed made a proposal here also -- unlikely to be taken seriously -- https://www.federalreserve.gov/central-bank-digital-currency.htm https://www.federalreserve.gov/central-bank-digital-currency....) The working theory to my understanding of such proposals is: "We shall qualm the thirst of the public for digital, and also have a more effective tool to price/change the scarcity and cost of having paper money directly bypassing the banks." >"The day when we have the central bank digital currency, any digital euro, I will guarantee it," she said. "So the central bank will be behind it. I think that is vastly different from any of those things." What Christine meant to say is she doesn't like it that a central bank is not involved, because it has implications for her job and IMF as a private lending institution if people can move money that easily. She is not wrong though in her warning; it is a risky asset. Yet to that effect other stocks for instance have much higher volatility and have been shorted to death. Bonds and gold have/had plummeted at various occasions despite that. And diversifying is almost impossible -- e.g. some hedge funds while having perfectly hedged were doomed as Lehman went down taking their assets with it. I think historically and using physics and economics we can assert only one think, that everything tends to have zero value in the end -- \lim \limits _{t\rightarrow \infty} value(t) = 0. In that effect she is right. (Empires will crumple, habits and attitudes shall change, and if not the sun will finish the job.) P.S. Personally, the day central banks have a digital currency that is forced eventually is the day I call 1984 done. Central banks are always political beasts and tools.