[reactordev]

Money is make believe if it’s not backed by something. Ever since 1970s, money has been a figment of imaginations. We only have a semblance of balancing (or attempting to) the budget but reality is they just print the paper or update a sql row. Done. More money.

[JumpCrisscross]

> Ever since 1970s, money has been a figment of imaginations

Money has always been a social construct. There is no fundamental particle of currency.

[reactordev]

right, something we have assigned a value to. We disagree on. We find the common denominator and have a deal or we don't. could be a sticky note, could be a rock, but we decided it's 2.5"x6" paper with ink on it.

[mothballed]

There was no deal, except maybe initially the promise to exchange for gold that the government defaulted on.

The government said pay taxes in USD or go to jail. They pay their contractors and employees USD (some of which can essentially be "eased" out of thin air). After those people get it, they can say "jump bitch" and you or someone you want to trade with will do what they say, because without those USD you won't be able to settle your tax debts.

[throw0101a]

> There was no deal, except maybe initially the promise to exchange for gold that the government defaulted on.

Gold came into the "money" game quite late. The earliest forms of money we have are with credit, on tablets dating back to Ur III (>3000 BC); gold came later (Lydians in 700 BC).

Credit has been part of many societies, even that had gold/silver floating around (because for most of the folks who were near the bottom, they didn't have enough to lay claim to any precious metal):

* https://en.wikipedia.org/wiki/Debt:_The_First_5,000_Years

Even the much-vaunted Gold Standard was only really a thing for ~50 years:

* https://en.wikipedia.org/wiki/Gold_standard

And it's not like it provided price stability:

* https://archive.is/https://www.theatlantic.com/business/arch...

In some circumstances the use of gold as the base of currencies caused problems:

* https://en.wikipedia.org/wiki/Panic_of_1857

* https://en.wikipedia.org/wiki/Long_Depression#Causes_of_the_...

[mothballed]

We've gotten sidetracked somewhere. I replied to this:

>but we decided it's 2.5"x6" paper with ink on it.

It was clearly referring to USD, not whatever the David Graeber of the IWW was saying happened 5000 years ago while talking about "everyday communism."

Since ~1792 up until, depending on when you want to argue, some time in the 20th century USD was backed by or defined by gold or silver.

Price stability has gone down the toilet since the 70s when the government defaulted on its gold backing. Prices were remarkably more stable under the gold standard. https://images.squarespace-cdn.com/content/v1/50060e33c4aa3d...

As for gold standard an 50 years or some such (IDK about those numbers, but lets take in on face for a moment), sure but it was a direct drop in for silver standard which lasted "from the Sumerians c. 3000 BC until 1873." [0] The idea there was a precious metals backing, not that the PM has to necessarily be gold.

[0] https://en.wikipedia.org/wiki/Silver_standard

[reactordev]

It’s about the fallacy of putting our faith into something as simple as a piece of paper, or a stamped piece of metal, or a bead on a string.

[JumpCrisscross]

> without those USD you won't be able to settle your tax debts

In countries where people don't want to hold the local currency, they exchange whatever for local currency when they need it.

[mothballed]

That's where "or someone you want to trade with" comes into play. It turns out it's highly useful to have the currency that ~300M people with the largest tax debts in the world need. There's no other currency backed by that much violence.

You can always be assured there is some American who desperately wants to stay out of jail, and someone will want to buy their stuff.

[JumpCrisscross]

> it's highly useful to have the currency that ~300M people with the largest tax debts in the world need

The drivers are consumption and investment. Not taxation.

If you want to sell to the richest consumers in the world, you get dollars. If you want to finance something from the deepest financial market in the world, you accept (and repay with) dollars. (Both of which drive demand for, and thus deepen liquidity around, dollar-denominated financial assets.)

Demand for currencies and the level of taxation are barely correlated.

[reactordev]

Storage Wars exists for this