I think your thinking along the lines of our money holding intrinsic value which it has none... its paper it has no value.... its only value is that its accepted as payment.... gold is gold.... it has a constant value.... a constant demand.... if the demand rises then so does its value.... if we link money to that your money would actually appreciate as their is only a fixed supply of money.... and items you went to purchase would be priced in gold... forget how much something costs as its irrelivent the value of the dollar would be set by the amount of a commedity we held... whatever that may be... weather your mortgage is 1,000 dollars or a million dollars a month as long as you make enough to pay it with roughly the same amount of income it has the same value to you..... we could completely replace our currenty money supply with a new smaller supply with much greater value...or not...Originally Posted by Kärnfysikern
Correct me if Im wrong(I know hardly nothing about economy) but if a currency is bound to a comodity, doesnt this mean the state has to ensure they own as much of the comodity as the money they print?
In that case I cant think of any metall or similar that can be used in a large modern economy.
Reply With Quote
). If a currency is bound to a comodity, lets say its gold. How do you handle economic growth without "running out" of the comodity, the economic growth rate is exponential but the resource base offcourse isnt. 