this post was submitted on 08 Feb 2025
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Ehhh, not sure I'd go that far. Money, no matter what backs it, is just what people value it as. Just that when backed by real goods, e.g. gold, that it gives people a better reason to value it because the goods are worth something.
Mostly saying, money backed by a good have at least the value of the good itself. Which I would say makes money not fake.
When it's backed by belief, then it's fake.
But if it’s not backed by belief, it doesn’t work.
The value of those “real goods” is typically just as fake as the value of fiat currencies anyways. Trying to use things with actual usefulness as money has its own issues too.
Modern money is backed by the economic power of the state issuing it, so its workers, infrastructure, education, soft and hard power. Those are definitely real things with real value.
To be fair i was being hyperbolic. Money has the power we give it. And we gave it too much.
We print money through increasing interest rates, increasing divide between rich and poor requiring the working class to take out loan after loan after loan.
Some may say interest is the cost of borrowing money, but it is money value that comes out of nothing, it's made out of thin air and reduces the value of our dollar.
But then said good only has as much value as we put on it. There's a tacit acceptance of what a group of people decided that good is worth. Its value is as real as we collectively decide it is; it's a construct
Yes, but things like gold have actual uses which give them at least some actual value. Fiat currency is backed 100% by belief.
Gold as a currency only has as much value as people assign to it. It's really no different than a fiat currency.
Fiat currencies are actually backed by the tax liabilities denominated in them. If you are liable for one of my business cards, else a guy with a gun shows up at your door, you suddenly have demand for my business cards.