Any economists out there - question
3 watchers
Feb 2021
4:50pm, 3 Feb 2021
55,639 posts
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GlennR
You're not wrong, 3M, but the system has its own constraints. A government can create as much money as it wishes, but if the fundamentals don't add up then it can quickly end up going Zimbabwe. Puzzler's post and the associated blog are making that point. It's worth noting that money is never 'real'. Gold has no economic intrinsic value. More precisely, there's an underlying value there somewhere, reflecting its use in electronic devices and what have you, but that is completely swamped by the demand from people using it as a save haven. There's no more substance to it than there is to Bitcoin. |
Oct 2022
8:07pm, 16 Oct 2022
3,445 posts
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JRitchie
Great thread. Money isn’t real - it’s an IOU based on trust. Ages since I actually held a paper note but I’m sure the words on it was something like “I promise to pay the bearer”. Ultimately it’s about confidence. How much trust do you have in UK plc to pay its debt and interest under the stewardship of the government. |
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Oct 2022
8:21pm, 16 Oct 2022
65,996 posts
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GlennR
When I was lecturing on financial economics, my party trick was to hold up a note and read out those words “I promise to pay the bearer…”. I would then point out that not only does that tell you it’s not real money, but also those words are a lie. If you take the note along to the BofE all you will get in exchange is another note.
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