Quote:
Originally posted by Scipio
And you make my point! It's fiat money. The paper itself has little inherent value and no utility. Its value is actually derived from two things. One, it's scarcity, meaning the supply is more or less controlled (which is where the government comes in). Two, people will accept it as payment. It doesn't have value by decree. If the government didn't issue dollars, we would just use pounds or euros.
I stand by my prior statement, as I don't think your "basic economic theory" has done anything at all to contradict it.
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A small correction: it's value is determined by 1) how difficult it is to obtain (scarcity, as you pointed out) and 2)
what I can do with it (it's relative value).
In otherwords, if I can't do anything with this fancy paper, it doesn't matter that it is scarce; it becomes merely something to collect as a hobby, which I may or may not do.
edit to add:
And it's no skin off my nose that want to believe this, so no hard feelings.
But if TSHTF, good luck with your paper.