Why is money worth anything?

[Tijuana]

Why is money worth anything?

Lets face it since it was taken off the gold standard its just now promises from countries that is seen as trustworthy.

Money from shitty country's aint worth the paper they are printed on but countries like the US and Britain and the EU is worth something?

At the end of the day its just paper and numbers on a computer screen but why is that certain countries money is worth more than others when its all the same worthless paper?

I feel like there is thing thing called an education that would explain this an other things for you. We don't really have the time to explain it all for you.

[hrugner]

Why is money worth anything?

Lets face it since it was taken off the gold standard its just now promises from countries that is seen as trustworthy.

Money from shitty country's aint worth the paper they are printed on but countries like the US and Britain and the EU is worth something?

At the end of the day its just paper and numbers on a computer screen but why is that certain countries money is worth more than others when its all the same worthless paper?

Mostly it's based on your government's ability to force people to accept its value and under what circumstances they will force that acceptance. So, in the US, if you owe someone a debt they are required to accept US currency to repay that debt. They don't have to accept it up front, but if you owe someone money they are required to take the US dollar at it's current value.

[Dezerte]

Look up fiat money. Money is worth something because we have accepted that it's a valid currency that has value.



@11:02

[Cæli]

It's worth something because almost everyone think it's worth something

[Independent voter]

You could carry around 10 pounds of rice to use in trade. A pound of rice would be worth about a dollar so if you wanted a candy bar you'd get your scale out, weigh out a pound to trade.

[kamuimac]

Why is money worth anything?

Lets face it since it was taken off the gold standard its just now promises from countries that is seen as trustworthy.

Money from shitty country's aint worth the paper they are printed on but countries like the US and Britain and the EU is worth something?

At the end of the day its just paper and numbers on a computer screen but why is that certain countries money is worth more than others when its all the same worthless paper?

money is nothing more then a promise - long long time ago when money didnt exist people traded only stuff for stuff - you wouldnt want to live in those times.

[Deleted]

money is worth something because the person you buy your food from thinks it's worth something. he thinks it's worth something because somebody else that has something he needs thinks it's worth something.

that's the most it's ever gonna matter for most people.

if you ask them about specifics they will probably say something like "it's my countries currency" and for most people who can post on this site, their countries stability is not something they have to worry about.

relative worth of one currency to another also doesn't matter for the average person, if anything look at things like big mac index or how much bread or milk a unit of currency buys you.

[Soeroah]

Everyone has agreed it's worth something. That's why.

If something happened that took money out of the picture as a viable system it would be replaced either with something else people believed had value, or a bartering system.

I just read a dystopian novel where gold and money were essentially useless and were replaced with "water credits" as the currency, because fresh water was rare.

[Eldar45]

This was posted literally two days ago. I found it quite enlightening.

[Cerus]

Humans have always used something deemed valuable to barter with. Furs, spices, plants, precious metals etc. Paper currency is just a universal and simpler form of trading things for other things and was once backed by gold.

[Sunseeker]

If thats the case why aint chinas money worth more than the US seeing chinas economy is destined to outstrip the US? Will the Yuan be the global currency? Or is it tied to the fact the US will be the top dogs military for a long time to come plus its government is stable therefore more trustworthy?

Chinese currency doesn't fluctuate with the market, China's government sets it at a fixed value against another currency (for a while, a single currency, recently, a "basket" of currencies). It would actually be worth more if it did float, but the problem becomes that makes their products more expensive. A significant portion of the Chinese economy is smoke and mirrors. If they actually let their currency float, their products would become too expensive to purchase and their economy would take a serious dive as demand (and thus production) drops.

[dextersmith]

Because it's a better system than bartering.

[unbound]

Why is money worth anything?

Lets face it since it was taken off the gold standard its just now promises from countries that is seen as trustworthy.

Money from shitty country's aint worth the paper they are printed on but countries like the US and Britain and the EU is worth something?

At the end of the day its just paper and numbers on a computer screen but why is that certain countries money is worth more than others when its all the same worthless paper?

In regards to the gold standard, here is a good read why the gold standard wasn't nearly the good thing many people think it was - http://www.theatlantic.com/business/...charts/261552/

In regards to why money is worth anything, it is worth something because it has value. I want money because it allows me to get things that I want. This is called Fiat Money, and it works because everyone else also values it, and there are no realistic reasons to think the major governments that back the money are going to collapse anytime soon or that the value will decrease too rapidly in the future. High level overview here - http://economics.about.com/cs/neocla...e_of_money.htm

[Kokolums]

Modern money is something like a share of stock in a country. Stock prices fluctuate depending upon the overall health of the company. Money's value fluctuates depending on the overall health of the nation that printed it.

[Kujako]

(sigh) here is why we're never going back to the gold standard and why we were wise to leave it.

Total value of all the gold in the world is around 8.2 trillion. US GDP is around 16.77 trillion.

[Deleted]

Because we say so.

A currency is just a better way of trading a horse for a sheep.

Because what if you got a horse, want a pig but the guy with the pig wants a cow ?

[Cerus]

(sigh) here is why we're never going back to the gold standard and why we were wise to leave it.

Total value of all the gold in the world is around 8.2 trillion. US GDP is around 16.77 trillion.

Nice google search there. You took a Wikipedia estimate of all the gold mined by the end of 2011 using the price from 2013 and posted it as factual in order to criticize why the gold standard was bad.

If you had actually clicked that link and read the information you'd see that the estimate is a pretty big guess. Reasons why the estimate is off:

Gold has been mined for thousands of years.
Many any countries don't advertise how much they mine.
There's no way to estimate gold obtained from illlegal mining operations.
It doesn't account for gold tied up in jewelry which isn't traceable.

That estimate of a bit under 200,000 metric tons is just a fraction of the estimated 120+ billion metric tons of gold left on earth. So do the math with the numbers form your Wikipedia/google search.

1 tonne of gold at 2013 price of $48.2 million.
120b tonnes of gold left on earth at 2013 price per tonne of $48.2 million.

The national debt is sofa change compared to how much is left.

[TwoNineMarine]

Money is only worth what people feel it is worth.

Especially since we are on fiat system. There is no direct representation anymore (no gold standard) so it is literally what we want it to be worth.

[Gamdwelf]

Money is only worth what people feel it is worth.

Especially since we are on fiat system. There is no direct representation anymore (no gold standard) so it is literally what we want it to be worth.

And honestly there is nothing really wrong with that.

[Trump]

Money is an illuison, a completely man made construct. It means absolutely nothing. It used to actually have some value but as of today money, itself, is an illusion. In today's world money is rarely even used in it's actual historical form. Most people have a bank account with direct deposit. Every 2 weeks some numbers are added and as you purchase things numbers are subtracted. You purchase things with 0's and 1's (online transactions, credit/debit cards). More numbers are transferred through cyber-space but nothing tangible (money) is actually transferred anymore. In most likelihood all physical money will cease to exist over the next few decades.