The Value of Money

So, I’ve been inspired by Prismatic’s thread ( on the dollar ) to create my own thread about the value of money, in particular: the dollar.


1.) Do we, really, need to have our dollars backed up by gold? Could society function without it?

2.) If yes, then how come primitive societies could function by merely exchanging coins?

I’m not adept in economics, so forgive me if I come off benighted; but frankly I think the value projected unto money by gold is an illusion, better yet, a delusion!


An odd coincidence I put my two cents worth on just this question in the former blog on the dollar,Mao I shall not repeat it here.

I think ancient societies exchanged the worth of the coins, just as we do the worth of money. The coin was made of silver, copper or whathaveyou, and that had practical value. Feudal Japan used rice as a basis for currency, a note would be written by e.g. A lord representing a proportion of his rice yield, and such things were the precursors to modern e.g. Pound notes.

The value of gold and gems is in the strength of the promise they represent. A government promissory note, the dollar, can go bad, but gold and gems are independent of governments (which is why modern governments don’t allow you to own gold to any significant degree).

i was thinking of making a thread too. Was going to ask. “Will people still demand to have what they deem has no value?” For example take a look at history when the first TV came out. It was in high demand right? Everyone wanted it because it was new and a rarity. Then better things came out and no one wants the old anymore because they do not place any value on it. What if we did that to money, what would happen to the world and how would it change for the better?

Yeah ancient times used gold, silver and bronze coinage. Especially Rome.

Because the coins themselves were gold, silver and bronze. The very things we use to represent our paper money. Gold and silver.

The greatest problem with immaterial money is the ease with which a governance can delete someone’s worth and manipulate the world.

The thing I’m trying to get at here is that we don’t, really, need to have our money backed up by gold.

The government already creates dollars in a very intricate, detailed fashion, so that counterfeits are difficult to make. We don’t need gold to keep track of the cash and so on; if the government suspects that someone has fake money, then all they need to do is examine it closely.

Indeed, Romans paid in gold and silver pieces. Gold-pieces with heads on them weren’t worth more than gold-pieces with no heads on them. The worth of precious metals does not depend on state authority but on their atomic structure (they are incorruptible).

Pieces of paper with intricate prints and watermarks are worth more than empty pieces of paper only because a bank has made a promise that there is something real (gold) behind them.

The origin of the banking system is the promise that worthless pieces of paper will continue to be given worth by someone who makes the claim to have things of real value in his vaults.

That claim is the important thing. The value of money is faith, the value of gold is physics.

No. You do not need to, but you should have your dollars backed up by gold, because gold is much more safe than paper. If it comes to a monetary crisis and your dollars are not backed up by gold, then all your dollars are lost, because of the lack of safety.

Yes. It could, and it can, because you and I live in such societies, and they function as long as there is no monetary crisis.

Because they were much more interested in a very much concrete money and in safety. Coins, goods, other things, houses, lands etc., animals, and even slaves seemed to be “moving money” or even “living money” (animals, slaves). They did not have huge problems with their monetary system, because money was much more safe: backed up by the goods, other things, houses, lands etc., animals, and slaves.

Never mind, Erik. The less safe your money is, the more risk you have. The dollar is as safe as the trust (faith, belief) in it is safe. Thus the dollar is one of the least safe currencies of the world. The dollar and other currencies are risk currencies which have their safety merely in paper and people who have trust (faith, belief) in this currencies.

Yes. And that is what most people do not understand.

Another aspect of today’s money is that the same money is used more than once e.g. If you have a million dollars in the bank, you can use it as credit to purchase something, and the banks are also using the same money for their purposes. No doubt ‘the city’ also uses the banks money to make all their trades. The only thing that matters is that we have faith in its value, even though there is no universal value.

Immaterial money makes the 1% of the humans richer and richer (more powerful and more powerful) and the 99% of the humans poorer and poorer (less powerful and less powerfull). Both groups differ more and more from each other, so that they have nothing to do with each other anymore. Perhaps they will become two different subspecies of the species homo sapiens or even two different species ( :open_mouth: ) … :wink:

^^ Change happens, eventually there will be something which replaces capitalism and socialism ~ the means of such separation.

I think technology will be that thing, eventually it will get rid of need, which perhaps capitalism requires to survive.

Would you mind going into details?

Details about the future? Well e,g, if you make the ultimate machine i.e. One which can produce another ultimate machine and can make a set of permanent products [diamond, carbonado, graphine], then eventually even poor African villages will have the means to build what they need. This will remove the need for manufacturers and business ~ you just print up what you need. Then you need a similar ultimate machine which can produce foods from basic chemical ingredients, and nano-filters and such to produce said chemicals.

Come to think of it, a quantum printer will do the lot.

I asked this because of two of my threads:

Well it may be so that humans replace all machines :mrgreen: i.e. If we don’t find a way to keep making machines or run out of raw materials.

I think that inevitably something will replace both humans and machines [as we know them].

For comparison:

( Wed Apr 30, 2014 1:37 am )