Monday, April 11, 2011

Real Money is Gold, Silver, and Oil, Not Paper


I found these two illustrations interesting given that the countries of the world are revisiting the Brenton Woods agreement. On August 15th of 1971 the United States president at the time Richard Nixon closed the gold reserve window. This meant that foriegn holders of US currency could no longer get their paper currency swapped with physical gold. After 1971 the paper money supply and people's attitudes toward debt have gone through the roof. Hopefully the world always has faith in the US dollar because things will get ugly if the world doesn't.

3 comments:

Heywood Jahsuckmey said...

"Real" money is whatever your society accepts as "valuable." Belly-button lint is "real" money as long as people accept it as an exchange vehicle for goods and services. The problems are more complex than simply going back to the gold standard. Paper money is a sufficient currency in a system of sound, ethical finanical decision-makers. The people need to be held accountable (more orange jumpsuits), not the currency.

Cousin Leon said...

Credit and debit cards are the only form of currency we will have soon. Which will make us even greater slaves to big bankers.

http://www.cnn.com/2011/OPINION/04/11/frum.bank.debit.fees/index.html?eref=mrss_igoogle_cnn

Trader Bob said...

Good point Leon. Heywood, yes in a sound ethical currency system this would be correct.