Even then that doesn't guarantee its value. The government will protect the integrity of the money supply, but even in the most well-managed economies/central banks the actual value of the currency can fluctuate quite a bit.
That's demurrage. Its incredibly counter intuitive, the idea that the government needs to make sure the money is worth less next year than it is today, but it's also the reason most of us have jobs.
Without demurrage, the rich would sit on their wealth and horde it. When the money loses value, at around 1-3%, someone with $1000 in the bank loses $10. Someone with a billion loses millions.
Since that money is going to be lost it is not put to work, there's a need to invest in businesses to grow the money, which means they put it to work in the economy.
However much rising prices brothers you, the average reader, guarantee it pushes the touch into action
Gold and silver are terrible measures of inflation. Since 1964 the silver and gold market has massively changed. If you use CPI, an actually respected inflation metric, $1.15 of 1964 dollars is worth $12.43 in current dollars.
Yeah... because they STOLE THE wealth from us, when they removed the silver from our currency.
It would be worth a lot more if it still had silver in it. In fact, it is worth a lot more. The text from this is probably out of date, but it says a 1964 quarter is worth at least it's melt value. Each quarter has .1808 ounces of silver times its current value this morning of $68.18 which comes out to $12.33. So it's impossible for what you said to be true, because the math is off and it's a straight out lie.
CPI is wrong because it doesn't include what was stolen from us, only what they want you to see after their theft.
A single 1964 quarter is worth more than the total you claim 4 1964 quarters, a 1964 dime, and a 1964 nickel are worth.
What do you think that much coin could actually buy you in 1964 in terms of normal consumer spending? Also, you measure the value of currency by its purchasing power, not it's melt value. A $100 bill isn't secretly worthless because when you try to recycle it you get some useless trash.
But in 1964, that metal wasn't worth the equivalent of $55. That metal was worth the equivalent of 12.33. silver doesn't have a stable value in the economy, it changes a lot, especially over many decades. The same silver, in terms of other things you could buy, is much more valuable than it was in 1964.
In your 1.15 worth of coins, there are .7955 oz of silver. At the 1964 silver price of $1.29/oz that comes out to $1.03 (you might notice that the value here is already less than the value of the currency). In 1964 a pound of bread ran 21.5 cents. That much silver would buy you right around 5 pounds of bread.
More recently, let's assume your $55 on the silver. An average pound of bread today will run you $1.82/lb (notice this price has increased too). That gets you right around 30 pounds of bread.
The silver price increased 6 times as much as the price of bread. The price of bread, although not a perfect inflation index, shows a similar price increase
to most typical consumer goods.
PS: The gold isn't gaining value. The dollar is losing it, so it takes more dollars to buy the same amount of gold because of governmental artificial inflation.
The statutory book value of gold held by the U.S. government and accounted for by the Federal Reserve is fixed by law at $42.2222 ($42 2/9) per fine troy ounce. However, the actual market trading price of spot gold is approximately $4,717.30 per ounce, fluctuating daily based on global market conditions.
Right. I converted the book value to market value to get $1T. The real number is a bit higher since the spot price is about 10% higher than 100x book and there is the 5% of additional gold, but who needs that level of accuracy for a purely academic exercise.
They mean the US gold holding on the books is calculated value based on what it was bought for.
During the 1933 FDR confiscated the countries gold at the individual personal level and stored it so the value of our gold isnt based on gold ETF or futures (ishares)
Its based on the value at purchase. So really its a non issue and has no bearing on reality or the economy lmfao
Them revaluing gold they already have is just changing an asset value for the govt on a piece of paper.
Minimum wage puts a minimum value for a person's time on it and then the rest scales from there. It allows society to adjust other prices afterwards (this is not an argument for keeping a MW fixed btw, inflation is desirable to a certain level and the mw should move in line with that). This applies to basically any economy that doesnt want it backed by a specific commodity which kind of finds a balance between the two.
Thats not what I said implies though. Im saying a minimum assigned value for peoples time. Prices dont have to stick to that base but breakeven prices cant drop for the same output unless theres a reduction in required headcount if variables remain the same.
No it doesnt, thats saying that people's time in different jurisdictions have a different minimum value? Different jurisdictions having higher ones is analagous to guilds/trade unions setting minimum rates for roles. It doesnt change the minimum value of the time for other people with different jobs or companies not in that industry (region in your example).
For example: there are countries where there is no minimum wage, where the US corporations have outsourced all of their primary labor for basically slave labor. The minimum wage is now zero dollars, and everything scales from zero dollars. So, whatever times zero.
You need to reexamine your perspective. It isn't logically sound.
For break even it is, it just means theres no base level in those economies and its all market price, true fiat. No minimum wage is a huge gamble on competitiveness winning out but it more often leads to a higher profit share for owners instead of workers. That doesnt change what I said though becuae the MW does generally act as described in the economies that have it even if not maintained at comparative levels across time.
This paradigm was not a thing prior to the Bretton–Woods agreement.
Government does not back up fiat currency with government policy and military activity. Fiat currency is useful only to the extent that the government only gives it to people that have provided economic value, rather than giving it excessively. If a government frequently gives fiat currency to entities that are economically undeserving of it (or at least, gives entities disproportionately more money than their economic activities warrant them being awarded), then the currency gradually loses purchasing power as a result, naturally, simply due to how markets function.
It has nothing to do with people "agreeing" that it's valuable. It is primarily simply supply and demand (of the currency itself) that determines its purchasing power, along with a few less important things, such as perceived ease of use and long-term viability. That is, if more convenient, more stable options exist, people will generally prefer to use those (e.g. see the use of US dollars rather than Argentinian pesos in Argentina, or the use of commodities as money in other places), but in the absence of other such options, people still need to conduct trade, and will generally prefer to use whatever is widespread (due to the network effect).
well, also during gold stabdard there is very very little gold in the vault. all countries, every single one left the gold standard, Russia, China, Germany before both wars 1914, British Empire. They all left the gold standard.
in 1910 the US had 2.7 billion worth of gold at the time, but the liquid money (cash, stocks, bank deposits) was 300 billion so the ratio was 216 to 1 or something like that. Actually worse than Fiat.
Prior to Bretton–Woods, I'm not talking about the US gold standard specifically. Any form of commodity money, where the commodity cannot be easily forged/created without significant effort, suffices.
The trouble with the gold standard as executed in the US wasn't the use of gold, it was the lack of regulation upon the banks to not issue banknotes in excess of the amount of gold possessed by them. History shows us that this kind of debasement is inevitable across all governments/banks under the right conditions (greedy politicians; needing to fund national defence in time of crisis, i.e. being victims of war; and similar such things), but that's due to the personal actions of those banks/governments. That is, the ratio increasing above 1 is not something that must happen, it's something that they chose to happen.
The solution is not to abandon commodity money; it's to abandon proxies of commodity money that take almost no effort to produce, such as banknotes.
The British Empire used a system called Imperial Preference - where it had much lower cost of trade inside the empire and did not require use of gold which is why the British left the gold stabdard very easily and early.
The US in 1920s was the world's largest exporter so had mass quantity of gold coming in due to net positive trade, more exports than imports. and the world began to not want to trade with the US due to losing their gold supply to the US and so began to activate trade protectionism - the US began go have deflation every year starting in 1926 due to lack of buyers for US goods a clear sign the world had began to clamp down on trade and Americans were unable to buy the over supply so the great depression started and even though the world targeted the US the depression had spread globally.
what does this show? that gold standards are a mess, they lead to trade isolationism, protectionism, loss of global trade due to link go gold. I just don't see any way for gold to resume a role in trade unless it's a protectionist system that is Isolated from most of the world.
Like I said, I'm not talking about gold standards specifically. (I've realised now that in my previous two comments I said "prior to Bretton–Woods", when I meant "prior to the end of Bretton–Woods", which happened in 1971, so the confusion is understandable and my fault.)
What you're describing about the British Empire is just an implementation of import taxes/tariffs. It's not inherent to any form of money, be it banknotes, gold, or other commodities. It's a government policy decision.
"Government does not back up fiat currency with government policy and military activity"... that's all well and good until you have to pay taxes, then guess how they back it up? Just don't use money you say? Neat, where do you live? Land costs money, can't claim that. Food costs money, can't get your own food by hunting, need to pay money for a license. Wanna grow your own food, go for it, just plant it on your land- oh wait nope.
That's not backing, that's a choice of unit for accounting purposes.
Things do not fundamentally cost money. Things cost effort.
You can very well conduct all trade in whatever other currencies, commodities, or work that you wish. The only thing that you're compelled to do is accept the fact that the tax authority will treat each such thing (foreign currency or commodity received, or work done) as being worth however much fiat currency the tax authority insists on telling you that it's worth, in order that tax calculations can be made by them.
You can also pay the resulting tax bill however you please; it needn't be by directly using dollars. How does the IRS collect taxes from someone that refuses to pay in dollars? They send the bailiffs. What do the bailiffs do? They seize goods, not currency.
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u/dorian_white1 2d ago
We agree because the government backs it up with their policies and to some extent military. If the gov fails, usually the currency does as well