| > USD has become worthless ever since Nixon removed the gold standard in 1971. This is verifiable by looking at inflation figures. But of course the question is was it caused by coming off the gold standard, and was coming off the gold standard a bad idea? I am not an economist or historian, so I don't know. I can see the argument for having "control" over your nation's money rather than rely on some fluctuating commodity. Also would a gold standard cause gold wars? On the other hand, if you peg to Gold, there is less scope for a nation to "cheat" it's citizens. These films and in general the ideas, such as calling money "Fiat" as an insult, talking about creating money from thin air, and so on have been around for a long time. Often they leave out important details. Yes you create money from thin air when a bank lends you money. But they create equal credits and debits, take on risk, and need to fund the operations of the bank, and perhaps pay interest in an almost guaranteed way (with no guarantee of the loan being repaid). So the bank is providing a lot of value there, and is no different to a bakery creating bread out of ingredients and taking a profit. I think I ready once that the inflationary effect of the new money is countered by the interest obligation, so it doesn't tend to lead to hyperinflation. And by setting the base rates, central banks can try to contain inflation. I think it is a bad idea to keep money long term as cash. It is designed to lose value over time. I am sure I will lend my kids or grandkids a million dollars in the future. Not because I am rich. Maybe just enough to buy a car :-). I kind of think you should see decent assets, as defined by your research, as "money" and dollars and cash as "a convenient but expensive tool to do trade with", if that makes sense. |