01-15-2018, 12:37 AM
(01-15-2018, 12:21 AM)Kinser79 Wrote:(01-14-2018, 02:51 PM)David Horn Wrote:(01-13-2018, 09:09 AM)Kinser79 Wrote:(01-13-2018, 07:41 AM)David Horn Wrote: The USD is as powerful as it is because it's reliable. Everyone needs a reserve currency to have for trade and a store of value. Eventually, it may be the Renmimbi rather than the USD, but not now or soon.
The reserve of choice for the past several thousand years has been gold and suplimented with silver. The use of a fiat currency as reserves is an adoration of those economic norms. If the Chinese manage to make RMB fully convertable to gold the USD will lose that "reliability" over night. But then again fiat currencies are reliable in only one thing...failing eventually.
There aren't enough precious metals in the world to act effectively as a reserve.
Actually the scarcity of precious metals make them almost perfect as a reserve. Even better as a backing for a represetational currency which for the majority of history all various monies were.
It is this fact that makes a gold and silver so useful as money. It tends to limit government spending and debt.
Democracy is the theory that the common people know what they want, and deserve to get it good and hard. -- H.L. Mencken
If one rejects laissez faire on account of man's fallibility and moral weakness, one must for the same reason also reject every kind of government action. -- Ludwig von Mises
If one rejects laissez faire on account of man's fallibility and moral weakness, one must for the same reason also reject every kind of government action. -- Ludwig von Mises