[cheeseomlit]

It makes more sense to me that money should have intrinsic value in and of itself rather than exist as some nebulous digit in a computer that represents nothing but a unit of debt, which is easily and inevitably abused by those with the power to create it from thin air. I don't know if precious metals are the best answer, but money as a commodity makes more sense to me than money as an infinitely dupe-able fiat token with no intrinsic value

[codersfocus]

You are using a basic understanding of economics then.

You need to understand economics as the metabolism of a larger organism.

This isn't just a hypothetical argument, it is reality. Let's take the digital device you're reading this with as an example. It's not created by any single craftsman. It is the result of millions of people's work. It is a "metabolite" of a larger organism.

You are a node or cell in a larger thing. Everything you know and can do is largely tailored to this system you're currently in.

Consider you are time-teleported back 10,000 years and come across a tribe of humans. Who would be more valuable to whom? Is your understanding of any of the technologies you presently enjoy sufficient enough to reproduce from scratch? Maybe a couple things, but they would most likely have a lot more to teach you than you'd be able to teach them.

I realize the above is very abstract from monetary policy, but the correct premise needs to be set before digging down.

Once you model economics as the metabolism of a larger entity, money reveals its true nature: to control what activities are performed by / within the organism.

There's no such thing as "intrinsic value" -- there is only a medium of exchange or signaling. This signal should not be tied to any physical thing, as that is inefficient to the state of an economy. There are better ways. Imaginary units are a more powerful tool, as they are not constrained by any physical limits.

You may be upset at how these IU's are currently handled, and rightfully so. The current methodology we have is very primitive. Our experts themselves (head of the Fed, treasury) readily admit this. When they take actions they "think" or "expect" it will have this or that effect. And the levers they pull are also very blunt.

When CBDCs come online, then we will start to realize a better economy. They will allow more granular control of things.

[cheeseomlit]

Money is a convenient means of exchange and valuation, I don't see the reason why my membership in society (node or cell in larger organism) should require that means of exchange to be imaginary- and I disagree that intrinsic value does not exist, though it may vary in the eye of the beholder. If I approach this stone-age tribe from your example and attempt to trade with them they will not accept my dollars for their goods- to them my dollars are kindling at best. Very little intrinsic value. But a physical commodity perhaps they would accept because it has some actual real-world use to them. Why should one party trade actual useful goods and services in exchange for imaginary numbers? Wouldn't it make more sense for trade real goods for real goods, provided one party's goods are viable for monetary use and can be reliably used as a means of valuation?

I won't argue that imaginary units of money are a powerful tool, they certainly are. So powerful in fact that there is no human on this earth who can be trusted to administer it without rampant abuse. The history of centralized planned economies speaks for itself, and I don't think further consolidation under CBDCs with more 'granular control' is going to improve its track record. The physical limits that constrain the use of commodities as money are what make it a viable as currency, it's a feature not a bug

[imtringued]

Money having intrinsic value is nonsense. Money is like a spread sheet. It's net worth is zero. The value you derive from the spread sheet is that it lets you organize your business or economy.

[HDThoreaun]

Monetary policy is one of the biggest reasons for the success of the world economy over the last century. Without fiat currency it would be impossible and loans would immediately get much more expensive, instantly destroying tech investment for starters.

[cheeseomlit]

A century is not a very long time, all things considered- we're all still high on the rush from this constant infusion of free cash, these are the good times. But I wouldn't base my entire outlook on how nice the good times are, there are massive risks involved with setting up a house of cards like this. There's a reason the constitution grants congress the sole authority to coin money, and implies quite clearly that money is to be silver/gold or backed by such. Nobody can be trusted with the authority to expand the money supply at will, unrestrained by the physical constraints of a commodity-based currency, free to print trillions upon trillions with no real oversight. That's how you end up with these ungodly banking cartels with disgusting amounts of political power (and all the corruption and cronyism that entails) while the middle class bears the burden of the feds inflationary practices, which is basically just an insidious form of hidden taxation. I'm not so sure that free money for tech startups is worth all that in the long run.

[HDThoreaun]

I'll just say that the rich and powerful existed far before fiat currency. The middle class has never been stronger than it is under fiat.

[cheeseomlit]

You're not wrong, and of course there are many more factors than just monetary policy alone that affect the lot of the middle class- But I'll point out that the middle class was much better off 50-60 years ago than it is now, back when fiat wasn't abused to the degree it has been for the past couple decades

[HDThoreaun]

In the US perhaps, but every other country also uses fiat and the global middle class has never been stronger. That suggests to me that there is a different, US specific reason for widening inequality.