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RE: The household debt put in proportions

in #economy6 years ago

I would like to point out, that not all money (or currency rather) is equal to another. So you cannot compare a natural element (like gold, but in principle all elements) with a randomly created currency like our paper money. Or worse, the digital form of fiat currencies that does not even exist as paper notes at all.
The amount of physical material - which is basically the mass of the planet - is finite, and in that case the theory of Amount/Number of People=Value could be used, even though it does raise some doubts.
With fiat money it is different, because the number of units is infinite. Even if the creator promises that he will not increase the amount - as history has shown that doesn't mean a thing.
So the entire exixtence of fiat currencies is based on the faith (lat.= fiat) of the users that it has a value - although it in fact has none.
And this faith in the value can disappear rather quickly under certain circumstances.
While the value of physical material is determined by much different factors. Availability first of all. but everything has a value, even iron and aluminum and such elements, even if half the planet consists of them.
And their amount does not really increase. Yes, there is some dust and meteorites and stuff raining down on earth all the time, but the amount is not really significant to make a diffirence.

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I would like to point out, that not all money (or currency rather) is equal to another. So you cannot compare a natural element (like gold, but in principle all elements) with a randomly created currency like our paper money. Or worse, the digital form of fiat currencies that does not even exist as paper notes at all.

I compared and I showed the similarity, and I also showed why my claims hold regardless of the similarity.

The amount of physical material - which is basically the mass of the planet - is finite,

I explicitly stated that materials can be brought from space, and in fact reached on their own from space.

So the entire exixtence of fiat currencies is based on the faith (lat.= fiat) of the users that it has a value - although it in fact has none.

Since you mentioned value, why should gold be valued more than drinking water or consumer goods?
Most of its value is based on faith too.
What use will gold have when SHTF?
As you wrote here:

And this faith in the value can disappear rather quickly under certain circumstances.

While the value of physical material is determined by much different factors. Availability first of all.

Availability over usability?
In this case a certain picasso picture should cost more than 10^9 USD.
After all, there are more 10^9 USDs than a certain unique picasso picture, not to mention that most of these USDs are not even printed on paper, just entries on computers' HDs.

but everything has a value, even iron and aluminum and such elements, even if half the planet consists of them.
And their amount does not really increase. Yes, there is some dust and meteorites and stuff raining down on earth all the time, but the amount is not really significant to make a diffirence.

It was significant enough to bring their entire deposits to earth.

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