US dollar = fiat money, - GoFuckYourself.com

DBS.US · 08-12-2014, 11:10 PM

Throughout history, most currency (including the US dollar) was linked to valuable commodities, and the amount of it in circulation depended on a government?s gold or silver reserves. But after the US abolished this system in 1971, the dollar became what is known as fiat money, which means it is not linked to any external resource but instead relies solely on government policy to decide how much currency to print.

http://ed.ted.com/lessons/what-gives...-doug-levinson

aka123 · 08-13-2014, 12:41 AM

Yea, thanks for the update. Pretty much every money is fiat money in these days, since gold digging, or whatever is/was the linked stuff, they wont keep in the economy's pace. We need money and we have no time to wait some gold diggers digging more gold, to get more money.

Just think that your income would rely on some gold diggers in Alaska, etc. LOL.

"Thorough history, most trade was made with chickens, etc." (I edited your sentence a bit)

RummyBoy · 08-13-2014, 06:53 AM

Damn straight and that's what makes it so vulnerable to a loss of confidence. During the years of gold standard (before Nixon took it off) the dollar was stable for a long time and inflation was very low.

Every currency in the world was gold backed purely by virtue of the fact that everything was loosely pegged to the US dollar.

Now everything is loosely pegged to the US dollar just as before, however the US dollar is pegged to nothing (its 100% fiat currency) and very vulnerable to a loss of confidence. So hence, its very sensible to own some commodities in todays environment...... savvy investors recommend an allocation of at least 10% of your investable assets to precious metals such as gold, silver, palladium etc.

It's worth noting that when Nixon took the USD off the gold standard in 1971, gold went from $24/oz to over $840/oz in a 10 year period - 3500% gain.

aka123 · 08-13-2014, 07:21 AM

First of all "everything" is not even loosely "pegged" to USD. Secondly, as you speak about loss of confidence: gold's price is very fluctuative and most of it's value is speculative.

Loss of confidence to fiat money is not any big danger, because it would require some serious shit, that you would stop using it, and or others will stop accepting it. Fiat money's, or any money's value is not in it's value itself. The value is that others take it as a payment, or will take if offered (option). That's the whole fucking purpose.

And any "savvy" investor won't keep much of his money in "cash" anyways. It's much better to buy bonds etc.

dyna mo · 08-13-2014, 07:27 AM

and so concludes today's 3rd grade level civics lesson.

tomorrow, we learn the alphabet song!

is this really how bad TED shit has gotten? I thought it already tanked with that bullshit halycon *give a can of beans to a stranger to be happy* nonsense.

kittykatt · 08-13-2014, 07:28 AM

MURCA

RummyBoy · 08-13-2014, 08:10 AM

Quote:

Originally Posted by aka123

First of all "everything" is not even loosely "pegged" to USD. Secondly, as you speak about loss of confidence: gold's price is very fluctuative and most of it's value is speculative.

Loss of confidence to fiat money is not any big danger

Well it would be better to say that some are pegged but all others trade around the USD because it is the reserve currency, mode of trade and because all commodities are measured in USD.

The USA is still the largest trading partner so countries have to peg to the USD in some way shape or form. EUR and USD basically trade within a wide band of each other. It has to be that way for trade flows (import/export) to operate normally.

As for loss of confidence, I guess time will tell.... but the rise in precious metals over the last ten years is basically resultant of the loss of confidence in paper money. Precious metals don't generally go up in value, rather paper money goes down in value when measured against them.

Sure all precious metals are volatile but then so is the USD, the stock market etc. In any case, its just marginal diversification that wealth managers recommend. Im sure Bonds also might be a part of your portfolio, but unlike precious metals, you have counter party risk.

Where do you see the Gold price, for example, ten years from now?

08-12-2014, 11:10 PM	#1
DBS.US Geo Cities Industry Role: Join Date: Aug 2003 Location: North Captiva Island, Florida USA Posts: 11,832	US dollar = fiat money, Throughout history, most currency (including the US dollar) was linked to valuable commodities, and the amount of it in circulation depended on a government?s gold or silver reserves. But after the US abolished this system in 1971, the dollar became what is known as fiat money, which means it is not linked to any external resource but instead relies solely on government policy to decide how much currency to print. http://ed.ted.com/lessons/what-gives...-doug-levinson __________________ Make a Free Chaturbate White Label site in 34 minutes and be making money tonight

08-13-2014, 12:41 AM	#2
aka123 Confirmed User Industry Role: Join Date: Jul 2014 Location: 64 00 N, 26 00 E Posts: 4,450	Yea, thanks for the update. Pretty much every money is fiat money in these days, since gold digging, or whatever is/was the linked stuff, they wont keep in the economy's pace. We need money and we have no time to wait some gold diggers digging more gold, to get more money. Just think that your income would rely on some gold diggers in Alaska, etc. LOL. "Thorough history, most trade was made with chickens, etc." (I edited your sentence a bit) Last edited by aka123; 08-13-2014 at 12:53 AM..

08-13-2014, 06:53 AM	#3
RummyBoy Confirmed User Join Date: Dec 2009 Posts: 2,157	Damn straight and that's what makes it so vulnerable to a loss of confidence. During the years of gold standard (before Nixon took it off) the dollar was stable for a long time and inflation was very low. Every currency in the world was gold backed purely by virtue of the fact that everything was loosely pegged to the US dollar. Now everything is loosely pegged to the US dollar just as before, however the US dollar is pegged to nothing (its 100% fiat currency) and very vulnerable to a loss of confidence. So hence, its very sensible to own some commodities in todays environment...... savvy investors recommend an allocation of at least 10% of your investable assets to precious metals such as gold, silver, palladium etc. It's worth noting that when Nixon took the USD off the gold standard in 1971, gold went from $24/oz to over $840/oz in a 10 year period - 3500% gain. Last edited by RummyBoy; 08-13-2014 at 06:55 AM..

08-13-2014, 07:21 AM	#4
aka123 Confirmed User Industry Role: Join Date: Jul 2014 Location: 64 00 N, 26 00 E Posts: 4,450	First of all "everything" is not even loosely "pegged" to USD. Secondly, as you speak about loss of confidence: gold's price is very fluctuative and most of it's value is speculative. Loss of confidence to fiat money is not any big danger, because it would require some serious shit, that you would stop using it, and or others will stop accepting it. Fiat money's, or any money's value is not in it's value itself. The value is that others take it as a payment, or will take if offered (option). That's the whole fucking purpose. And any "savvy" investor won't keep much of his money in "cash" anyways. It's much better to buy bonds etc. Last edited by aka123; 08-13-2014 at 07:33 AM..

08-13-2014, 07:28 AM	#6
kittykatt Confirmed User Industry Role: Join Date: Jun 2013 Location: San Clemente Posts: 584	MURCA __________________ Kira Basciano - Sales Associate Email: [email protected] Skype: kirakittykatt ICQ: sucks Buy & Sell Ads on The Most Sexy Advertising Network on the Planet available ad spots \| sign up now

08-13-2014, 07:27 AM	#5
dyna mo The People's Post Industry Role: Join Date: Dec 2008 Location: invisible 7-11 Posts: 65,120	and so concludes today's 3rd grade level civics lesson. tomorrow, we learn the alphabet song! is this really how bad TED shit has gotten? I thought it already tanked with that bullshit halycon give a can of beans to a stranger to be happy nonsense.