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I never stated that the dollar would be completely worthless, I only stated that it's backed by absolutely nothing. For all the same reasons, it does not matte

by mjnaus 18y ago

I never stated that the dollar would be completely worthless, I only stated that it's backed by absolutely nothing. For all the same reasons, it does not matter that the US government accepts dollars. It matters what you will get back for those dollars. When, if ever, people will come to collect en masse, the US government will have no means what so ever to pay of those creditors, in other words, the government becomes insolvent and the dollar plunges.

bokonist 18y ago
Currencies do not need to be backed by anything. They are simply intermediary goods, valuable because of a coordination game. There is no "collecting in mass". The dollar is the final good. The U.S. has no debts outstanding in anything other than dollars ( which is quite a nice situation to be in).
- mjnaus 18y ago
  In my world, goods and services I purchase are the final goods, not the money I need to purchase them. About "collecting en masse", I guess time will tell. You might be right, for those holding large amounts of dollars (China for example) a "run on the US government" would be a bad thing, they're better off unloading their less valuable currency gradually and exchanging them for something with intrinsic value such as gold and silver. And in the mean time, the dollar will keep on loosing it's value.
eru 18y ago
When the creditors come, they will get back what they have borrowed: Dollars. Why should that be a problem? Remember: The US is indebted primarily in Dollars. Not in cars, gold or Euros. They can not go bankrupt for lack of their their own currency.
jerf 18y ago
It's not backed by nothing. That's empirically, objectively false. You just don't like what's backed by. In another comment of yours, "In my world, goods and services I purchase are the final goods, not the money I need to purchase them." This is also objectively wrong. Sorry, the dollar is backed by the US government and I'm afraid those things are derived, not fundamental. You are mistaking what you want to be for what actually is. And because of money's recursive nature, regardless of what you think about that, the fact that a dollar can be used to pay off Uncle Sam means it's usable to pay for a loaf of bread, too. Furthermore, it doesn't matter what you base a currency on, it will always work this way. Base it on something like gold and the currency will still have higher order effects that aren't directly connected to gold. That's the entire purpose of money, to reduce the problem of trade to a single universal currency and thereby enable an economy to develop, instead of being stuck on barter. Barter may be concrete, but that's just about the only positive thing going for it. (Even a barter-based economy will still prove vulnerable to bubbles and all the other problems of a money-based economy, it just won't also generate enough wealth to survive such things. Some things like economic cycles are fundamental to economies themselves and can be seen in economies where Man has no participation at all. Ecology can be seen as a degenerate case of Economics with no intelligent participation.)

by mjnaus 18y ago

bokonist 18y ago

Currencies do not need to be backed by anything. They are simply intermediary goods, valuable because of a coordination game. There is no "collecting in mass". The dollar is the final good. The U.S. has no debts outstanding in anything other than dollars ( which is quite a nice situation to be in).

mjnaus 18y ago
In my world, goods and services I purchase are the final goods, not the money I need to purchase them. About "collecting en masse", I guess time will tell. You might be right, for those holding large amounts of dollars (China for example) a "run on the US government" would be a bad thing, they're better off unloading their less valuable currency gradually and exchanging them for something with intrinsic value such as gold and silver. And in the mean time, the dollar will keep on loosing it's value.

eru 18y ago

When the creditors come, they will get back what they have borrowed: Dollars. Why should that be a problem? Remember: The US is indebted primarily in Dollars. Not in cars, gold or Euros. They can not go bankrupt for lack of their their own currency.

jerf 18y ago

It's not backed by nothing. That's empirically, objectively false. You just don't like what's backed by. In another comment of yours, "In my world, goods and services I purchase are the final goods, not the money I need to purchase them." This is also objectively wrong. Sorry, the dollar is backed by the US government and I'm afraid those things are derived, not fundamental. You are mistaking what you want to be for what actually is. And because of money's recursive nature, regardless of what you think about that, the fact that a dollar can be used to pay off Uncle Sam means it's usable to pay for a loaf of bread, too. Furthermore, it doesn't matter what you base a currency on, it will always work this way. Base it on something like gold and the currency will still have higher order effects that aren't directly connected to gold. That's the entire purpose of money, to reduce the problem of trade to a single universal currency and thereby enable an economy to develop, instead of being stuck on barter. Barter may be concrete, but that's just about the only positive thing going for it. (Even a barter-based economy will still prove vulnerable to bubbles and all the other problems of a money-based economy, it just won't also generate enough wealth to survive such things. Some things like economic cycles are fundamental to economies themselves and can be seen in economies where Man has no participation at all. Ecology can be seen as a degenerate case of Economics with no intelligent participation.)