mindmetoo
Joined: 02 Feb 2004
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 Posted: Thu Nov 27, 2008 2:45 pm Post subject: |
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| bacasper wrote: |
| OK, so then you ought not mind giving me all your "phony" money then. |
No because a fiat currency has numerous advantages over a gold standard. A nation doesn't mind sending dollars to china in return for goods. If china chose to take those dollars out of circulation, the USA can simply print more. If China took gold, the USA can't mine much more gold to replace the gold.
All money, including gold, has a value based purely on what people agree it's worth. I'll take USA or Canadian dollars for my labor or my house because I believe I can get so many air conditioners, Big Macs, laptops, beers, and lap dances out of it. By the same token, you might accept gold as payment under the belief you can trade it for so many air conditioners, etc.
To wit, I much prefer a currency with a worth determined by the broad spectrum of a nation's economic output and activity, not a currency determined by a limited supply of gold whose value reflects a narrow economic view. |
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