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Originally Posted by 4-2-7
The cost of living is low! I know that sounds weird right?
When we look at economics we have to look at who is driving it.
It doesn't take more labor to bake a loaf of bread today as it did fifty years ago. What has made the cost of bread rise in cost in those fifty years. If anything it should cost less with technology.
By not having a currency pegged to something with intrinsic value ie:"Money" all hell breaks loose. Something that can't be produced out of thin air that has value.
Since the USD is not pegged to anything but a promise to pay  lol Fiat Currency, A note of a promise to pay is all the USD is. It is not money.
Nothing stops the printing of currency so the presses run and run. But there is a problem to doing this. It's a dilution of the currency supply meaning it reduces the value of the currency in circulation. The value of your saved dollars are not the same as when you put them in the bank. In fact the interest earned does not keep up with this. So you put your dollar in and in short time it's only worth 50% it's value at deposit.
It's funny, not really  Most have no clue of what currency is, how it's born and who is doing it. |
the gold standard has nothing to do with our current economic fragility. If you were to actually peg every dollar to a ounce of gold in a vault you would take so much money of circulation that the mother of all depressions would soon take place because of the deflation such a move would cause.
Gold is a fiat too if you really think about it.