jigar

below is a post i posted elsewhere..reposting here -

gold silver are scarce... if shit became scarce would you hoard it ??
shiny is all they are.. people wanting diamonds and "precious" metal jewelry if they like to wear to adorn themselves or industries wanting it for tech applications..i.e an actual USE is ok.. i think its a outdated concept of gold backed stuff.. -

electronic money rotting! ? - why would that happen... ? - is the holder stupid to not buy up some assets with it.. or simply issue loans at lower rates ? - or even invest in creating a new market.. - money never stagnates..if it does it means trouble..

money is a medium for exchange of goods... the most basic ones are the ultimate guarantee not luxury products..- if a region produces 200 million tons of food, and theres enough water - if food and drink are the only commodities with a significant market.. - you cannot have more money than what will buy up the 200 million ! - or the excess money is a waste and available for abuse/tricks and will cause inflation.... - but if theres a market for healthcare,leisure,sports,communications etc ... it is possible to put in more money - jobs created etc..- given theres enough food and water, there is no problem..- ? money allows the exchange of goods to sustain ... creative pursuits find greater importance, etc

but assume there is a famine, money from before is hoarded up - but there isnt enough grain so price keeps rising ! ? assuming gold was used as a backer, grain can be imported from overseas , - but only if there is an excess elsewhere.. - prices go up to a lesser extent...but as a seller, do i accept the countries currency or demand gold? how do i ascertain the REAL Value of the billion dollars- that it will actually be equivalent to something of equal worth.. if they do the quantitative easing like the US did? -- or more money than actual goods will mean wealthy people act as a sponge and live well OR more money less goods = inflation.. - i could instead take a promisorry note for replenishment of equivalent grain plus 10% as profit in gold/currency ? they can avail credit by offering up anything of value, their infrastructure, agricultural lands could be pledged on paper.. much easier to trade ? - akin to stock markets.. i would prefer such security over gold... - its always marketeable. plus the price/volume is irrelevant now.

what i am trying to resolve is how are currency values arrived at - and whether gold is relevant still - why are incredibly smart bankers and countries..i assume filled with rooms of people smarter or atleast who give more thought to this still running with gold... and allowing the US currency to stay steady when its being diluted all the time plus has weak fundamentals... i beleive it might be that institutions and countries sitting on stock piles of euros and dollars are trying to find as many suckers as they can to offload and minimize their losses ??

OR the US and EU buy up assets overseas with an overvalued currency.? by giving out stakes they can enhance or diminish to the world, they keep their own currencies inflated.., print more whatever ? i know countries cannot be so stupid they dont catch on so i assume theres more to the picture ????