[Baff]

They value it because it is an effective medium of trade.
You know you can buy something with a £.
in and of itself it has no particular value.

Only as a medium of exchange.
It is a trade good.
The purpose of it is to trade with and not to use for anything else.

[SueDeNîmes]

Yeh - obviously. Why aren't seashells or repeated assertions from you thus valued? Why is currency backed by some govt the "medium of trade" everywhere?

See if you can reply with something more than repetition of what you've already asserted.

[Baff]

Seashells are not the convention we use.
It started with tally sticks as far we know.

I suggest to you that a seashell is too easy to gather. To easy to counterfeit.

No currency backed by any government is "the" medium of trade everywhere. There is no global currency.
However most currencies are traded around the world.
So I can't use a $ in every shop here, but I can take it to a bank or a travel agent/currency exchange and trade it in those shops here.
It is tradeable and does have value. Just for most people it's more trouble than it is worth. They don't accept it.

[Rancid]

I think these days, when we say the Dollar is "backed" I think it really means it's just backed up a military.

[Crantag]

This Baff guy has shown himself time and again to be a complete ignoramus on economic topics. He just makes shit up.

[Steve_American]

This Baff guy has shown himself time and again to be a complete ignoramus on economic topics. He just makes shit up.

Yes, I agree.
. . But, not only that. He doubles down on his assertions without much if any evidence or supporting words even. Just more assertions. Then when refuted he triples and quadruples down by repeating his assertion without any evidence still.
. . He is a really strange guy, almost troll-like.

[Baff]

Aaaw poor babies.
Is the nasty man interrupting your echo chamber.

Conspiracy theory's have their own forum boys.
Down at the bottom.

Come back when you aren't radical left wing cranks talking arse and thinking it sounds smart.

[Crantag]

Aaaw poor babies.
Is the nasty man interrupting your echo chamber.

Conspiracy theory's have their own forum boys.
Down at the bottom.

Come back when you aren't radical left wing cranks talking arse and thinking it sounds smart.

Come back when you can find your ass with both hands, on topics of economic theory.

Yeah, that'll never happen.

Economics isn't the art of making shit up.

It is called the science of common sense sometimes, but that only applies to people who understand economics, which doesn't include you.

[SueDeNîmes]

Seashells are not the convention we use.
It started with tally sticks as far we know.

I suggest to you that a seashell is too easy to gather. To easy to counterfeit.

Cowrie shells - especially Cypraea moneta (literally "money shells") - were probably the earliest and most widespread currency. They're still quite valuable but have, everywhere, long since been replaced by govt-backed currencies.

No currency backed by any government is "the" medium of trade everywhere. There is no global currency.
However most currencies are traded around the world.

Gov't backed currencies (plural) are the medium of exchange everywhere. Why? :



i.e. basically the same reason the Romans taxed conquered provinces in their own currency. If everyone must have denarii, they become the currency of account for which everything becomes exchangeable. Thus, when you want real resources - grain, cattle, cloth, labour, soldiers, whatever - you don't have to fight local farmers or chieftains, you just give them coins you've minted.

So I can't use a $ in every shop here, but I can take it to a bank or a travel agent/currency exchange and trade it in those shops here.
It is tradeable and does have value. Just for most people it's more trouble than it is worth. They don't accept it.

, he added for no apparent reason.

[SolarCross]

taxes give fake money value, hard money doesn't need tax for value.

[SueDeNîmes]

Fine - if we accept your definitions it would appear that capitalism needs "fake" money and all successful capitalist economies have, by now, been forced to abandon "hard money".

[SolarCross]

Fine - if we accept your definitions it would appear that capitalism needs "fake" money and all successful capitalist economies have, by now, been forced to abandon "hard money".

For how long though? Fake monies always fail sooner or later. Hard money is immortal.

[SueDeNîmes]

On the contrary, all extant currencies are fiat currencies. Its like saying mammals fail sooner or later because most species have gone extinct, therefore bring back the dinosaurs.

[SolarCross]

On the contrary, all extant currencies are fiat currencies. Its like saying mammals fail sooner or later because most species have gone extinct, therefore bring back the dinosaurs.

And they are all losing value day by day. Counterfeited currencies are not new and even fully fake money, fiat money, is not new, but they always fail. There is no progress towards fake money from hard money. No there is a cyclical swing from hard money to fake money and back again. When the fake money fails again we will go back to real money.

[Victoribus Spolia]

Gov't backed currencies (plural) are the medium of exchange everywhere. Why? :

The problem with this argument is it assumes what has to be proven, that "gold stars" were introduced by a state in the first place.

If there were no "mother" in this poster, would there ever have been gold stars?

Yes.

the market demand for the rare (supply v. demand) that can serve as a medium of exchange (fungibility) is all that is required for hard money.

Gold was perfect because not only was it rare (and shiny!), but it has a relatively low melting point for a metal and was also relatively soft, making it perfect for making into little bits (coinage).

Mediums of exchange will always occur because barter is clumsy and subject to greater relativity in imputing values on the market, leading to a lack of price consensus which is necessary for trade. Weights and measures involving an accepted medium like Gold are inevitable given human nature. No state required.

Fine - if we accept your definitions it would appear that capitalism needs "fake" money and all successful capitalist economies have, by now, been forced to abandon "hard money".

All States that intend to expand their wealth and power MUST abandon hard money because the finite supply of hard money limits their purchasing power.

Paper money, or any fiat currency, increases the government's ability to spend (and therefore grow in size, scope, and power) because it now has no "credit limit" beyond "the confidence of the general public."

This last point (public confidence); answers why all fiat currencies have gone extinct and why gold is not analogous to dinosaurs (not to mention that dinosaurs do not come back every time we have a species go extinct; whereas, gold always reemerges after a fiat collapses).

Gold is a limiter of the state that arises naturally and independently in free human exchange and works apart from it. That being said, fiat currencies require some level of central planning by a state, which as we learned with the Soviet Union and Early Maoist China, leads to economic stagnation and problems.

Eventually, the state will encounter an event where its control of the money supply is too inflexible to deal with the problem; whether it be a war (which collapsed the Athenian monetary system), or massive debt payments in a slow economy (which collapsed the Weimar monetary system) et al.

As soon as the money supply fails to adapt to some traumatic circumstance, public confidence falters, and the currency collapses as hyper-inflation results and people revert to barter or hard money that still has "pubic" value and confidence.

[SueDeNîmes]

And they are all losing value day by day.

They are not. Supply of them is being incrementally increased so that growth isn't stunted by deflation.

Counterfeited currencies are not new and even fully fake money, fiat money, is not new, but they always fail. There is no progress towards fake money from hard money. No there is a cyclical swing from hard money to fake money and back again. When the fake money fails again we will go back to real money.

Then where are all the non-fiat currencies? Why have all the rich countries forced off them by now?

[SueDeNîmes]

The problem with this argument is it assumes what has to be proven, that "gold stars" were introduced by a state in the first place.

If there were no "mother" in this poster, would there ever have been gold stars?

Yes.

the market demand for the rare (supply v. demand) that can serve as a medium of exchange (fungibility) is all that is required for hard money.

Gold was perfect because not only was it rare (and shiny!), but it has a relatively low melting point for a metal and was also relatively soft, making it perfect for making into little bits (coinage).

Mediums of exchange will always occur because barter is clumsy and subject to greater relativity in imputing values on the market, leading to a lack of price consensus which is necessary for trade. Weights and measures involving an accepted medium like Gold are inevitable given human nature. No state required.

You have completely misunderstood the "this argument".

"Gold stars" means fiat currency, not gold.

All States that intend to expand their wealth and power MUST abandon hard money because the finite supply of hard money limits their purchasing power.

Paper money, or any fiat currency, increases the government's ability to spend (and therefore grow in size, scope, and power) because it now has no "credit limit" beyond "the confidence of the general public."

This last point (public confidence); answers why all fiat currencies have gone extinct and why gold is not analogous to dinosaurs (not to mention that dinosaurs do not come back every time we have a species go extinct; whereas, gold always reemerges after a fiat collapses).

Gold is a limiter of the state that arises naturally and independently in free human exchange and works apart from it. That being said, fiat currencies require some level of central planning by a state, which as we learned with the Soviet Union and Early Maoist China, leads to economic stagnation and problems.

Eventually, the state will encounter an event where its control of the money supply is too inflexible to deal with the problem; whether it be a war (which collapsed the Athenian monetary system), or massive debt payments in a slow economy (which collapsed the Weimar monetary system) et al.

As soon as the money supply fails to adapt to some traumatic circumstance, public confidence falters, and the currency collapses as hyper-inflation results and people revert to barter or hard money that still has "pubic" value and confidence.

All of which would appear to support what I said about fiat currency. You've just tacked on assertions that it can't last.

Acknowledgement of status quo noted. Opinion noted.

[Victoribus Spolia]

I would like to add to this conversation another very important point against both of you.

@SolarCross
@SueDeNîmes

Namely, that we are not technically operating on a typical fiat currency.

We are operating on a global petro-dollar system.

Technically, the dollar (and most other currencies which are tethered to the dollar), are backed in Oil.

Oil production is increasing (has not peaked), has increased demand (as the third world gets more industrial and developed), and the oil is generally consumed (burned up in engines, etc).

Being the reserve currency for oil (Nixon and Kissinger's solution to the potential disaster of dropping the gold standard in lieu of Bretton-Woods), not only saved the world from an actual mass fiat currency collapse, but also enabled the U.S. to spend with impunity as if it had a fiat currency, while still having the dollar based in something of actual value: Oil.

As long as production increases, and demand increases, and oil remains consumable, the U.S. can print en masse and never have to worry about hyper-inflation in the sense that a typical fiat system would have to. This is because the dollars (mirroring oil); always have demand and that demand is only rising along with the volume of oil produced (this supply dictating what can be printed in proportion to the demand, this demand never "stopping" because the oil is burned-up, and then needed again.)

It really was a brillaint imperial move on the part of the U.S.

Whether this system collapse, is entirely dependent on the role of oil in global politics (reserve currencies, etc), and its long term viability as a backing to the dollar.

_____________________________________________________________________________________________

FYI, @SueDeNîmes

Given your response above, where is it that you disagree with my points then?

No where I take it? Because I seen no actual objections or argument above.

[SueDeNîmes]

FYI, @SueDeNîmes

Given your response above, where is it that you disagree with my points then?

Where do you disagree with mine? Thus far you have acknowledged that taxation can give a currency value (why people might need and trade in it) but have tacked on Libertard arguments as to why that value is unsustainable or sub-optimal.

I'm happy to leave the latter standing their merits

[Victoribus Spolia]

Where do you disagree with mine?

Answering a question with a question, how sophisticated.

Libertard

Not an argument.

I'm happy to leave the latter standing their merits

What?