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First of all, the US dollar is not "the world currency." You need not go further than Vancouver to find places where USD is not widely used as currency. While

First of all, the US dollar is not "the world currency." You need not go further than Vancouver to find places where USD is not widely used as currency. While USD is a very strong currency, it is by no means the only currency in widespread use. It is equally false to try to separate money from law. Currencies have their value because of the law -- because of tax laws, and debt laws, and tort laws, and all the other laws that result in people being legally obliged to make certain payments. Control of currency is important to governments in the same way that control of speed is important to someone driving a car. The control is inherent and the issue is really about not completely screwing things up.

bdcs 13y ago
The US dollar IS the world currency if you round up from about 65%: http://en.wikipedia.org/wiki/File:Reserve_currencies.svg http://en.wikipedia.org/wiki/File:Reserve_currencies.svg Financial institutions buy dollars and sell the others when there is the slightest panic. Chinese buy Argentinean wine with US dollars. The USD holds a unique title, an exorbitant privilege. Furthermore, money operates outside of the law very often -- even dollars -- just look at criminal activities, both low-brow and complicated, e.g. off-shore accounts.
smokeyj 13y ago
> Currencies have their value because of the law Fiat currencies have value because their issuing institution has a local monopoly on violence. Your phrasing is much more palatable. > Control of currency is important to governments in the same way that control of speed is important to someone driving a car. Citizens are cars to be carefully driven by central bankers? How delightful! > The control is inherent and the issue is really about not completely screwing things up. The average age of fiat currency is about 27 years old. I don't understand where your warm tingling sensation is coming from.
- betterunix 13y ago
  "Fiat currencies have value because their issuing institution has a local monopoly on violence. Your phrasing is much more palatable." It does not have to be violence, you know. It can be non-violent -- like a general agreement by everyone that they will abide by the rulings of courts, even when those rulings work against their personal interests. Most debt disputes are resolved peacefully, even when people are watching their cars being towed away and even when they need to leave their homes. Even here in the USA, where the police are soldiers and more people are in prison than anywhere else, the majority of legal disputes are resolved peacefully and the majority of people at least try to follow the law. It is also false to claim that non-fiat currencies are not subject to this. A currency backed by, say, gold, is still a currency whose value arises because of the law -- a law that connects the paper money to gold in some way, and that requires some form of mandatory payments in that currency. If the US government decided to return to the gold standard, gold would be currency again -- whereas right now it is nearly impossible to trade gold for anything, even on the black market. So yes, the government does and will always have tremendous power over currency. Currency and law are inseparable except on the smallest scales.
- anologwintermut 13y ago
  Fiat currencies have their value because people agreed on that they have value. Bitcoin is more of a fiat currency than it is anything else. I.e. it has no value but for the consensus of people saying it has value and is not directly redeemable for anything that does value. Unlike, cows, iron,copper,gold, or promissory notes for them, which are the usual non fiat currencies. The fact that it doesn't depend on violence ought to tell you to stop blindly parroting every single libertarian catch phrase you hear. They are not all true.
  - smokeyj 13y ago
    Fiat currency typically means money declared by a government to be legal tender. You can argue the value of bitcoin is arbitrary, but that doesn't make it a fiat currency. Way to slam dunk a straw man.
chii 13y ago
The only currency that can surpass the US dollar is gold. The US dollar is the de facto world currency, because the world's oil is mostly traded using US dollars. The US Gov't enforces this, by using strong arm tactics, or resort to millitary intervention - case in point, Iraq.

bdcs 13y ago

The US dollar IS the world currency if you round up from about 65%: http://en.wikipedia.org/wiki/File:Reserve_currencies.svg http://en.wikipedia.org/wiki/File:Reserve_currencies.svg Financial institutions buy dollars and sell the others when there is the slightest panic. Chinese buy Argentinean wine with US dollars. The USD holds a unique title, an exorbitant privilege. Furthermore, money operates outside of the law very often -- even dollars -- just look at criminal activities, both low-brow and complicated, e.g. off-shore accounts.

smokeyj 13y ago

> Currencies have their value because of the law Fiat currencies have value because their issuing institution has a local monopoly on violence. Your phrasing is much more palatable. > Control of currency is important to governments in the same way that control of speed is important to someone driving a car. Citizens are cars to be carefully driven by central bankers? How delightful! > The control is inherent and the issue is really about not completely screwing things up. The average age of fiat currency is about 27 years old. I don't understand where your warm tingling sensation is coming from.

betterunix 13y ago
"Fiat currencies have value because their issuing institution has a local monopoly on violence. Your phrasing is much more palatable." It does not have to be violence, you know. It can be non-violent -- like a general agreement by everyone that they will abide by the rulings of courts, even when those rulings work against their personal interests. Most debt disputes are resolved peacefully, even when people are watching their cars being towed away and even when they need to leave their homes. Even here in the USA, where the police are soldiers and more people are in prison than anywhere else, the majority of legal disputes are resolved peacefully and the majority of people at least try to follow the law. It is also false to claim that non-fiat currencies are not subject to this. A currency backed by, say, gold, is still a currency whose value arises because of the law -- a law that connects the paper money to gold in some way, and that requires some form of mandatory payments in that currency. If the US government decided to return to the gold standard, gold would be currency again -- whereas right now it is nearly impossible to trade gold for anything, even on the black market. So yes, the government does and will always have tremendous power over currency. Currency and law are inseparable except on the smallest scales.
anologwintermut 13y ago
Fiat currencies have their value because people agreed on that they have value. Bitcoin is more of a fiat currency than it is anything else. I.e. it has no value but for the consensus of people saying it has value and is not directly redeemable for anything that does value. Unlike, cows, iron,copper,gold, or promissory notes for them, which are the usual non fiat currencies. The fact that it doesn't depend on violence ought to tell you to stop blindly parroting every single libertarian catch phrase you hear. They are not all true.
- smokeyj 13y ago
  Fiat currency typically means money declared by a government to be legal tender. You can argue the value of bitcoin is arbitrary, but that doesn't make it a fiat currency. Way to slam dunk a straw man.

chii 13y ago

The only currency that can surpass the US dollar is gold. The US dollar is the de facto world currency, because the world's oil is mostly traded using US dollars. The US Gov't enforces this, by using strong arm tactics, or resort to millitary intervention - case in point, Iraq.