Really? Do you think that printed paper is just that, paper?
These days, thats basically what it is. Fancy paper that works as a means of economic exchange. With an agreed upon value between parties.
Which does not preclude the unsavory practice of "price-gouging" or "price-fixing".
It’s monetary value must be underpinned by a hard asset.
Not necessarily - U.S history itself has many examples of company scrip. Which had an agreed upon value among the towns people and local merchants. Often a raw deal for the laborer - but nonetheless, a currency with little to no official securities backing it.
Ostensibly propped up by the productivity of the laborers themselves.
In the past, it was gold (ever heard of Fort Knox?). More paper dilutes the ratio of dollar to gold (assuming there’s actually gold still physically available).
Yes, i remember the days when i was told u.s. currency was backed by the u.s. treasury. But since that method of national securities backing has given way during digitization of banks. The economic welfare of our country seems to lean more on its GDP.
That is to say, how much are other countries willing to pay for what we are selling. Or how much another country is willing to sell us within a given budget.
But I could be wrong so sprinkle salt on that one.
Either way, some issues could be smoothed out by the perceivable benefits of a uniformly valued exchange token/unit/thing.
In a hypothetical post-societal scenario where digitization fails, the value of gold could also fall below that of booze and bullets. Since economics would revert to that whole "agreed upon value" thing.
I also recall a joke about diamonds and gem stones only being expense because De Beers said so.
The US has been borrowing money with debt from other countries because they have printed beyond their ratio of holding. Digital currency is still dependent upon financial holdings still represented by hard currency.
The u.s. has been in debt since the whisky rebellion.
I'm not sure exactly what loans you're referring to these days. But i feel my remarks on national GDP are relevant here. As it seems the u.s. may not be producing enough to make ends meet without some outside help. Which is more of a remark on the nations industriousness than the value of its dollar bill. Or mismanagement thereof.
The digital to physical exhange of currency is its own can of worms. Obviously, the u.s. SEC stepped in during the boom a few years ago. Put in their own risk-management and fraud prevention efforts so that parties who would agree to enable such transactions were competent and financially qualified to do so. Even though the digital currency being exchanged had no physical resource backing it, it held some market demand. So at a wildly flucuating, yet still agreed upon value, people could turn their bits into cash.
Bits, which were initially acquired through the production efforts of laborers. Specifically, computer programming. Developed as a means of exchange between parties.
Currency released into the system increases as the computer programmers labor. Its value remains as "whatever the people say it is."
Unfortunately, people are also fickle. So it has its flaws. But its a free-market, not influenced much by ruling politics.
All a shell game…
That we can both agree on.
