Things that people want have value. And we have more things that people want than we know what to do with.
Combine that with a stable (relatively) government and that's all the backing our currency needs.
Things that people want have value. And we have more things that people want than we know what to do with.
Combine that with a stable (relatively) government and that's all the backing our currency needs.
Normally your currency is, or at least backed by, something that is rare. Gold has always been held to a high value. From ancient times to now. It's also nice to mention that the value of gold (or silver) is usually pretty stable. It's not that gold's value has gone up, it's that the value of the dollar has plummeted. The Federal Reserve prints absurds amounts of US currency. That's what we call inflation. As for people finding a vein of gold somewhere doesnt reduce the value of already owned gold.
Look at the issues.
Hawkish on defense.
Pushes health care laws that the GOP first created.
Wants to both cut spending and increase taxes.
Pushes for gun control that is in large part wildly popular.
Supports social systems that are wildly popular on both sides.
I mean seriously, aside from the paranoid rhetoric he's really a centrist.
Any increase in the supply of gold decreases the value of gold. Basic market economics.As for people finding a vein of gold somewhere doesnt reduce the value of already owned gold.
And how do they trade things without something else of value. If the money is backed by nothing, it is worth nothing. How hard is that to comprehend? We can't barter, but originally money was meant to be more of an "IOU x amount gold/silver" than just some abstract idea of debt.
American debts are easily backed by its working force. Even modest tax increases would shave the debt to GDP ratio. Let's say 40% income tax on top earners, 5% federal sale tax and capital gains taxed as income aside from the first $10000 a year. There you guy, tangible backed debt.
The money is, again, backed by the immense wealth of the country that uses it. We use the currency as a proxy for that wealth since its more convenient.
And you can't really claim that "IOU X gold that's sitting in a vault somewhere that has little to no more intrinsic value than this paper" is more or less real than what we have now.
Is the push for gun control really "wildly popular"? I haven't seen many conservatives being happy with it.
I've seen quite a few conservatives who say 'YOU CANT BAN OUR GUNS!', and lots of other conservatives who say 'Increased Gun Control, especially eliminating the so called gun show loophole, would be a good thing'.
The only people claiming anyone is going to ban guns (or that it has a chance to stand up to the current SC) are the gun industry who are using fear and paranoia to sell firearms to the exact people that shouldn't have them.
I just don't get it, personally. I mean, no matter how much economic science you throw at it, it always come back to the fact that at some point we just arbitrarily decided that gold was valuable. I mean, if people think it should be valuable then I guess I'm fine with it. But to me, it makes more sense for a currency to be valued because you control resources, and the currency can be used to buy those resources.
Which is, if I'm not mistaken, what we're currently doing.
Two things:
1) I agree, but say you go to the bank and asked for your moneys worth of what it's back by, what would you get today? Nothing. As in it is $x worth of nothing. And where i come from anything*0=0.
2) Well the law of the US specifically states that the currency should be backed by precious metals.
Well you can't go to the bank and trade your money for gold, but you can go to the steel mill and buy a big chunk of processed metal which you can actually use. To me, that just makes sense. Our money is valuable because this country produces things that people want. Our currency grows and shrinks with our production capacity, and people's faith in our continued prosperity. Sure, it may not be as stable as gold-backed currency. But because we have such a massive economy, basing our money on our production gives us enormous economic power, which no other nation can compete with. We get a lot of benefits from the way our currency works. And in my opinion, those benefits outweigh the fluctuations in our dollar's value.
But I'll be the first to admit, economics is more of a casual interest to me than an actual area of expertise. Nobody should be putting too much value in to what I'm saying.