> "The first use of fiat money was recorded in China around 1000 AD. Since then, it has been used continuously by various countries, concurrently with commodity currencies."
Okay, so which country is that and from/to which dates? I see a generalized statement that it's been done but no specifics. You'll forgive me I hope if I'd like a little more information than "well this wikipedia article says..."
Let me clarify further that I'm not talking about paper money in general, but a particular paper money system. In other words, just because people have been trading paper for a thousand years doesn't mean it's been the same paper and that you could have successfully stored that value all the way from "back then" up until the current day, strictly in paper. Gold does that to some degree, though the exchange rate of gold to goods has varied pretty substantially historically. To my knowledge there's no paper which has held value for anywhere near as long.
Does my question make sense? Maybe the UK unhinged the Pound from silver in 1205 AD and it's been non-convertible since but it's held value so that would qualify (I know it's not true but it's an example).
> So you think physicists understand all about physics? I've got a bridge to sell you...
We understand physics well enough that we can build GPS which necessitates and understanding of relativity or else airplanes would be miles off of their autopilot at the end of a trans-oceanic flight.
But I'd love to be wrong, it'd be great if we knew things about economics to that level of precision. Life would be so much easier because then we could just DO THE RIGHT THING instead of arguing about it ENDLESSLY. As an engineer that holds tremendous appeal since the majority of the stuff I do has a spectrum of right answers and perhaps a few optimal answers and a spectrum of wrong answers.
I feel the level of maturity of economics is late stone age or early bronze age re: engineering. We've got some ideas about how things work and can even bend a few to our will but there's no precision calculation, just experts making gut calls.
> Absolutely true. Should we give up? Of course not.
It seems rather backwards to me to have historically well tested methods of storing value and to throw those at the wayside because we "know better" now. If you can't prove it's better, don't change it.
I realize that it's incredibly unlikely that we'd ever go back to a gold (or silver) standard but in my personal opinion the positive value that such a standard has far outweighs the negative. You may well disagree with me on the relative values of the benefits and downsides and that's OK. But it doesn't make me wrong either.
When so much of society values things differently (some people find Audi to be worth the money, others BMW, others Ford or Jag or whatever!) it's kind of crazy to assume that one person KNOWS that paper money is better.
Maybe a bunch of people would choose to transact in other currencies given the choice. A recent attempt was made to do so; the Federal government did not welcome the competition: http://en.wikipedia.org/wiki/Liberty_Dollar
Okay, so which country is that and from/to which dates? I see a generalized statement that it's been done but no specifics. You'll forgive me I hope if I'd like a little more information than "well this wikipedia article says..."
Let me clarify further that I'm not talking about paper money in general, but a particular paper money system. In other words, just because people have been trading paper for a thousand years doesn't mean it's been the same paper and that you could have successfully stored that value all the way from "back then" up until the current day, strictly in paper. Gold does that to some degree, though the exchange rate of gold to goods has varied pretty substantially historically. To my knowledge there's no paper which has held value for anywhere near as long.
Does my question make sense? Maybe the UK unhinged the Pound from silver in 1205 AD and it's been non-convertible since but it's held value so that would qualify (I know it's not true but it's an example).
> So you think physicists understand all about physics? I've got a bridge to sell you...
We understand physics well enough that we can build GPS which necessitates and understanding of relativity or else airplanes would be miles off of their autopilot at the end of a trans-oceanic flight.
But I'd love to be wrong, it'd be great if we knew things about economics to that level of precision. Life would be so much easier because then we could just DO THE RIGHT THING instead of arguing about it ENDLESSLY. As an engineer that holds tremendous appeal since the majority of the stuff I do has a spectrum of right answers and perhaps a few optimal answers and a spectrum of wrong answers.
I feel the level of maturity of economics is late stone age or early bronze age re: engineering. We've got some ideas about how things work and can even bend a few to our will but there's no precision calculation, just experts making gut calls.