Yesterdays post ended with a question – Can this avoidance of economic collapse continue without a major resdesign of the monetary system?
Reworded, is there a major devaluation of money coming if we don’t change something? Remember, in and of itself money has little value. You could burn it to keep warm, use it as toilet paper or to make paper clothes but there are better materials for these things than money.
Money is an instrument or tool critical in the exchange of goods and services. If money was not accepted in return for a good or service it is basically useless.
Demand for Money
Money is only in demand because it has a percieved value. If money suddenly has no percieved value or is of greatly diminished value some hope it will be replaced, by say gold or diamonds or bitcoins.
Ultimately though all these things are artifical constructs with a requirement for a perceived value. If the perception changes or dissappears so does the value.
Outside the box thinking
My thought is not to replace money, but rather to standardize it, one currency for the entire world, and fix how much is available and do not allow any manipulations like fractional reserve systems to exist (finally backto that, hope you were not holding your breath).
The currency then does not fluctuate in value and given it is world wide becomes the same everywhere. Hoarding it or trying to manipulate supply and demand via regulated interest charges or other such machinations would not work.
Goods and services (e.g., housing and food prices – basic necessities ) would not vary in value because the amount of currency was fixed and there would be no more available. That is, the money suplly would be an irrelevant economic factor.
Inflation, deflational, economic collapse, would all become all things of the past.
