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And who guarantees that an ounce of gold will buy me some amount of wheat? Or that a bushel of wheat will give me some amount of energy when eaten? Only a very
by Cushman 14y ago
And who guarantees that an ounce of gold will buy me some amount of wheat? Or that a bushel of wheat will give me some amount of energy when eaten? Only a very powerful entity can make such guarantees.
On that basis I would say that the word of the United States is far more intrinsically valuable than any physical object.
- Houshalter 14y agoGold has generally had stable value throughout history, but you are right that it isn't guaranteed. Other commodities like wheat are a little harder to use to back a currency, but from year to year they are fairly stable and pretty much guaranteed to have some value whatever happens. But US dollars aren't guaranteed to do anything for you either in such a situation. The currency could hyper-inflate tomorrow for all anyone knows, and it has no intrinsic value other than the requirement to pay taxes with it. It seems to work fine as a currency and maintain stable value, but the point is it really isn't backed by anything.
- Cushman 14y agoGold has been stabilized through history because it has been used as currency by powerful governments. If the powerful governments of the world collapse, they will lose control of their large gold reserves at the same time they lose the ability to feed their citizens. What do you suppose will happen to the commodity markets then? Nothing, neither gold nor grain, is backed by anything but power. Fiat currency is just the government accepting that responsibility de jure.