[quote]Neuromancer wrote:
[quote]orion wrote:
[quote]pat wrote:
[quote]orion wrote:
[quote]pat wrote:
Do you know why money has any worth?
Hold on…
Wait for it…
It’s coming…
Faith.[/quote]
The one we have now?
Yes.
The one it was derived from?
No wai![/quote]
Yes whey!
If nobody gave a shit about gold, for instance, it would not be worth a damn. Currency holds value because we believe everybody regards it the same. We’ve been programmed to believe money is worth something when objectively it’s just a piece of paper, or metal. [/quote]
Does not have to be gold, could be cigarettes too, or canned mackerel.
Yeah, canned mackerel.
A commodity money is usually durable, easily divisible and WANTED.
Not believed to have value, known to have value for other people.
Now you can go all Buddhist on me and say that all wants are an illusion, that would still not stop anyone from forming theories about what sort of delusional wants other people might have in the future. [/quote]
So fiat money works perfectly under those conditions you’ve described then. I would say the more generally accepted term for smokes and fish as currency would be barter…as skills would be a ‘commodity money’ or barter tool too.[/quote]
No, its not barter because you have eliminated the double coincidence of wants.
The moment you take something in return that you do not want but expect other people to want in the future, you have taken a big step on the road to a commodity money.
Fiat money might work for a while, or even indefinitely if the money is not inflated too much, but it could not come into existence in a free market.
All fiat moneys derive their undeserved trust in them from the commodity monies they replaced.