NOT IN THE SLIGHTEST, material will be worth the same amount always unless some market force changes the amount of material available, if a currency becomes obsolete or inefficient it is replaced immediately as was seen with Zimbabwean currency.... the country didnt change the value of their products when the currency became worthless, they simply got rid of the currency and people who invested in materials made money, those who didnt became sad. However its just occurred to me that if enough people became poor because of currency value decline then markets could be forced to adjust if they want people to buy their products. If the adjust doesn't happen quickly enough, then panic ensues and collapses happen.

I take it most here have never heard of the "bitcoin" currently worth something like 13 usd. Only x amount will ever be produced the number currently escapes me and doesn't really matter because the currency's value changes based on the value place on it. The currency can only ever become more valuable because of the fact that there is a limited number and that people want it.

The currency is somewhat difficult to explain however the best analogy i can think of would be if the old US dollar was backed by gold, and the current US dollar is backed by a belief in the government system, then bitcoins are based on the ability to solve a puzzle. YES THE ABILITY TO SOLVE PUZZLES! WHY? HOW? simple, you can mine bitcoins through the use of a graphics card and the more coins that are mined in total, the more difficult the puzzles become to solve. So less coins are produced for each unit of power your graphics card has.

BUT because so few people use the bitcoin its practically irrelevant. However if everyone used it, it would become an unregulated coin based solely on market fluctuations, graphics card power, and peoples imaginations.


In the end a currency is just a value holder for purchasing another object. If all currency failed then everyone would just go back to trading for things they needed and land as well as cows and other livestock or grains would become the currency, because those are intrinsically valuable to us as people who ingest food and live on land.


also @velair if they run out of new gold then the current gold becomes more valuable. and less gold will buy you more things.

also also @turtlenecks its been noticed that when the us dollar drops gold goes up in value because trading of gold is not done in gold coins, but usd.... since usd isnt backed by anything other than the us government it can be considered a fiat currency.

So this word inflation is getting used a lot. Just to make sure everyone knows what it is, it's when people have more money. If everyone with a dead-end job is making $10 a week then a TV is $50 but if they are all $5000 then a loaf of bread is $10.

It would be merely a matter of preference if all this money wasn't so damn expensive. I am excited about the decommission of the penny. Recycling pennies would be totally worth it for the next several years in the US. We already recycle billions in copper. With the weight of pennies, we do trillions for a couple years at least.

I think the most confusing part is that everyone on the world uses different money. I figured math would step in and figure out a nice least common denominator for everything. Especially with how many international companies there are. Did you know there are millions of dollars of cash being held by the government waiting for its home country to 'buy it back'.

Either you've got it backwards or your example is so poorly phrased that it makes no sense.

Typically, the government tries aiding the economy by printing more money in order to seemingly lessen the impact of spending. (Pardon if that's confusing as well, I'm quite tired.)

But anywho, like any other thing in existence that's been in circulation. The greater the quantity, the less and less such an item is worth.

If governments REAAALLY wanted to aid the economy, however. A good couple of first steps would be to STOP PRINTING MORE MONEY, and also lock the mortgage rates. Maybe even try emphasizing less foreign investment so that more money remains in circulation within it's own economy.

*EDIT*

If it helps your question the slightest. Since the European Union was created, and along with it came a new universal currency for Europe, which effectively dealt with nationally unique currencies. (ie: The Deutsche Mark, Pounds, etc..)
It could be expected for other regions to follow this example in the near/not so near future.

Many countries use USD when dealing externally.

Okay, economics for beginners; the "new universal currency for Europe", also know as EURO, has brought countries with little or no export goods (read tourist based economies such as Greece, Italy and Spain) to their knees. The reason behind this is that countries that accumulate to much coin (Germany, and to some extent France) does not suffer the drawback of a decrease in their local value as their currencies are bound to each-other, meaning a little profit leads to a large profit at the cost of the other participating countries within this currency union.

Now, the idea behind inflation you didn't really explain. It's often put as; I have a TV, now read ONE TV; there are two buyers wishing to buy this TV from me, and as such I can rise the price until only one of them is willing to pay. Now, people accumulate more and more money (coin) which only has an artificial worth as most (all) currencies are no longer bound to gold or any other raw material, and as such their worth decrease as the material that you wish to buy can be sold at a higher price as there are buyers with coins, more coins.

Now, you say that countries print to much money? Now, the worst thing that can happen in countries that export goods, and in a world where we believe that money should be in circulation, is the opposite to inflation, AKA deflation; the worth of currency (coin) becomes higher. Now, this is basically explained in the reverse of that of inflation, people have less and less coin, hence the TVs are sold cheaper, which would be required in countries such as Spain, Greece and Italy today.

However, there is no right or wrong to this debate, there is simply two or more sides, those who believes that there is no wrong that we have economical cliffs between different groups of society, those who believe that an economy should be static, and those who believe that saving money should be better than spending it (douchebags generally that do not understand that without a little effort you will not make progress, spendings in medicine and technology etc).

I'm deeply sorry that I didn't expand on this topic nor bring sources, but I am sure a few quick searches on google would bring you an easy to understand youtube walkthrough over inflation and deflation for elementary school, and there is really no need to make it more complicated in this debate, as it argues over the impact of currency, not net worth of such.


And you sir, clearly need an update on the current status of currencies around the world, and perhaps a recap of what happened 1971(?).

EDIT; Expanding the post (from this note and onwards)


Okay, lets get back to the topic; no.

Argument no1: We are already using flat currency in the western world, how the **** do you think US and A barely cheats the system every year with its super-low taxes and still provides in citizen with the social benefits? Let me just grasp at the top of this iceberg topic; they produce money out of thin air, lowering the net worth of a single dollar. Now, lets talk in general terms, and not assume that worth means in dollar/material or material/dollar but a rather stable currency such as the swedish Krona. Now, the swedish Krona has never been as highly valued compared to other currencies, yet, we (I come from sweden) suffer horrible blow to the society. We have over 8% unemployment (30 years ago people would panic if it where over 3% and demand that someone in the government committed suicide like in japan, or someone would blow the government to ashes.), the government is selling our hospitals, schools, drugstores, and basically everything they own. But on the other hand, we are one of the few countries with a Triple A mark, which means that our reserve can burrow money at a negative interest-rate, (The world is insane.) so no, a change to flat-rate currency would be to simply stay at what we are at; i.e. not change a thing. Hence, there will be no change.

Explain then. How is it we magically determine exchange rates and price values if there isn't a way to measure the value of a currency?

Gold and silver based currencies have a set worth to base the value of the currency on, but fiat currency does not. To most people, it looks like the worth of fiat currency is set at what people want it to be. But that's a ridiculous concept, as then the value of currency becomes redundant, as it's worth is now based on an abstract principle of arbitrary perception. Rather, as I stated in my previous post, fiat currency obtains it's value through credit. The more credit the government or body has that's producing the currency, the greater the value there is to support the currency's worth. And credit is basically the promise of future work or goods. An abstract concept, sure, but one that is possible to measure compared to arbitrary conceived worth. People can measure and value credit. People cannot measure and value perceptions based off thin air.


But to any end, regardless if money is fiat or not, currency retains the ability to change a person's perception of worth, and thus change a person's perception of a different objects worth. Rather than an economics question, this is more of a psychological question.

So, just to double check, agreeing to that we can't determine an actual worth, but speculate in it Oracle?

Actual worth is subjective. Currency's worth is not. It's a bit of a word game, but the actual worth of an object is subjective based on environment and the individual. Fiat currency worth is based off quantitative, yet abstract, principles of credit. Which in itself has subjective worth. But again, everything that can be described with words can be broken down into a subjective argument.

So you have to create a set point where subjectivity is either cut off or ignored. For currency, you have to draw the line somewhere. Where I believe it's drawn is at credit. Credit is given a concrete, objective value to give currency a solid base to establish an objective worth. If it wasn't, then currency would not be able to function as an effective mediator of commerce.

We are finally getting somewhere; Currency is a wage for us, and the partner we are trading with, right?


Are we getting somewhere on that point?, or do you wish to continue upon the path of arguing that there is a difference between what we have today and flat currency when both of these build on what you refer to as "creditability" or "credit"?

I have yet to see an argument for why it makes a difference from what we are using today, if someone prints more money (US and A) every single dollar loses a bit of its "credit", or if you want to see the same thing another way, the national bank loses "creditability" and thus the value of this currency (Dollar in this case) goes down.