What gives paper money its actual value - lol

mello said:
You will either be pissed by this story or laugh at how wrong it is:

http://sploid.gizmodo.com/what-gives-paper-money-its-actual-value-1595165039/all
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Yep, what a load of shit.

The answer is simple: Fiat money derives its value from the threat and application of violence by the state, and nothing else. If you fail to measure your savings and income in dollars and surrender a portion of those dollars to the state every year, you will go to jail. There is no other reason for anyone to accumulate government paper.
 
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Bern said:
Pass Ron Paul's Free Competition in Currencies Act and we'll start to see the true value of paper fiat.
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Indeed! :) Metallic fiat standards would probably fare best, but not necessarily. A free market in currency is the only way to know.
 
oyarde said:
What if I told you paper money really has no value :) ?
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I would disagree, then offer to accept all your paper money. Seriously, of course it has value. What's important to consider is how it manages to maintain its value over the years. Force and fraud are necessary to prop up the system. I've come to call it "Financial Feudalism".
 
Being more explicit, paper money actually DOES have value, if in the real world someone will exchange something of value for it.

The problem with paper money is that there is no guarantee as to how much value it will have, or if it will have any value at all over any given period of time; and thus it has way too much inherent risk to try and store value in a paper currency over any significant length of time.
 
buenijo said:
I would disagree, then offer to accept all your paper money. Seriously, of course it has value. What's important to consider is how it manages to maintain its value over the years. Force and fraud are necessary to prop up the system. I've come to call it "Financial Feudalism".
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The 1913 dollar now has about $.02 of purchasing power left. It would be less except for all of the US exported overseas inflation for the last century.
 
thoughtomator said:
Being more explicit, paper money actually DOES have value, if in the real world someone will exchange something of value for it.

The problem with paper money is that there is no guarantee as to how much value it will have, or if it will have any value at all over any given period of time; and thus it has way too much inherent risk to try and store value in a paper currency over any significant length of time.
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That's my point. All currencies (paper, metallic, or other) have this problem of unstability to one degree or another. Western societies tend to highly value PMs, but some bass-akward third world region may consider wheat far more valuable than PMs. One never knows how a free market in currency will turn out. That's the beauty and terror of freedom. :cool:
 
Ronin Truth said:
The 1913 dollar now has about $.02 of purchasing power left. It would be less except for all of the US exported overseas inflation for the last century.
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Relative to gold in the US, yes. The dollar's buying power relative to some currencies/economies is significantly higher. (Gotta check the currency exchanges to know which ones at any given time)
 
heavenlyboy34 said:
Relative to gold in the US, yes. The dollar's buying power relative to some currencies/economies is significantly higher. (Gotta check the currency exchanges to know which ones at any given time)
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Gold and silver are the ones I prefer and use. I can't think of how to do better than a historic free market unit of exchange.
 
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