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NewtC

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This is less true now than ever. How much of your money is actually in government-issued paper bills? I bet most of it is in the form of bits in some bank's computer, where it was "stored" when your employer sent some of it's electrically-encoded information bits to it. Then you "spend your governemt-guarenteed dollars" by swiping that bank's credit card magnetic strip over a store's scanner that then sends a signal to your bank to change the bit-pattern it uses to reprepresent your account balance.

Our money may be a bunch of numbers on a computer, but it still has value because the government says it does. There may not be a piece of paper covering every single number in there, but it's still valuable because the government says so. Those numbers are in dollars. If the government says, "Dollars have had a good run, but they're boring. We're now going to use Figgles!" then all those numbers at the bank become worthless. As I said, those numbers are in dollars, not Figgles. If the government says that one Figgle is worth two dollars, instead of having 1000 dollars at the bank, you now have 500 Figgles. If the government says that one Figgle is worth ten dollars, you now only have 100 Figgles. The government still controls the money, not the banks.

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This is less true now than ever. How much of your money is actually in government-issued paper bills? I bet most of it is in the form of bits in some bank's computer, where it was "stored" when your employer sent some of it's electrically-encoded information bits to it. Then you "spend your governemt-guarenteed dollars" by swiping that bank's credit card magnetic strip over a store's scanner that then sends a signal to your bank to change the bit-pattern it uses to reprepresent your account balance.

Our money may be a bunch of numbers on a computer, but it still has value because the government says it does. There may not be a piece of paper covering every single number in there, but it's still valuable because the government says so. Those numbers are in dollars. If the government says, "Dollars have had a good run, but they're boring. We're now going to use Figgles!" then all those numbers at the bank become worthless. As I said, those numbers are in dollars, not Figgles. If the government says that one Figgle is worth two dollars, instead of having 1000 dollars at the bank, you now have 500 Figgles. If the government says that one Figgle is worth ten dollars, you now only have 100 Figgles. The government still controls the money, not the banks.

 

This is true to an extent - but if the govrenment cannot simply change the value of money! If it could, inflation and stagflation would never exist and we would live in the land of milk and honey forever!

 

-J

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This is true to an extent - but if the govrenment cannot simply change the value of money! If it could, inflation and stagflation would never exist and we would live in the land of milk and honey forever!

Of course, that was just an example. However, the government can change the value of money by printing more or less. Inflation is caused when the governmet makes more money than it destroys each year, and deflation happens when a government destroys more money than it makes each year. More money equals less value per dollar as the government doesn't just magically get more wealth, and the reverse is true for deflation, too.

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Of course, that was just an example. However, the government can change the value of money by printing more or less. Inflation is caused when the governmet makes more money than it destroys each year, and deflation happens when a government destroys more money than it makes each year. More money equals less value per dollar as the government doesn't just magically get more wealth, and the reverse is true for deflation, too.

 

Do you think our economy would be more stable if we still used the Gold Standard? (This only applies to U.S. users, like ninja.)

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Do you think our economy would be more stable if we still used the Gold Standard? (This only applies to U.S. users, like ninja.)

What do you mean by stable? Less inflation/deflation? Possibly. Our money would be worth at least 16 times more than it is. That's for sure, but we'd also have about 16 times less of it in circulation. I really have no idea what our economy would have been.

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This is true to an extent - but if the govrenment cannot simply change the value of money! If it could, inflation and stagflation would never exist and we would live in the land of milk and honey forever!

Of course, that was just an example. However, the government can change the value of money by printing more or less. Inflation is caused when the governmet makes more money than it destroys each year, and deflation happens when a government destroys more money than it makes each year. More money equals less value per dollar as the government doesn't just magically get more wealth, and the reverse is true for deflation, too.

 

Modern governments don't create money by printing more - they do it by lowering interest rates. Most money exists in virtual bits - not in paper. It's much more complicated than you indicate -- if it were easy, we would never have recessions.

 

But the gist of what you say is true - money value is largely controlled by government actions. But it's not all good or bad - creating money will help those with no money but hurt those who already are working for money by devaluing their work.

 

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Money is also the cause of much worry, such as when some immaterial things that can't have a value are still charged for. The ability to keep a home for example. Is it truly really fair to keep charging someone for paying for a home in the first place? What if the home is kept in better condition while someone owns it than when it is empty? Plus, where is all that money actually going?
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For a simplified example I say that NOTHING that cannot think can't either be root of anything. Only the user of money can cause those "evil" things. However, like it's said already one's pain in the other's pleasure. So it is if I buy something, it causes me pleasure but may increase in a way or another suffering of some hungry poor child in somewhere.

 

I know that's a bit naive but so be it(no really, I'm just too English writer to bring up my point in more proper way).

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