fiat economy

[vinceayre]

Has an economy ever been successful based in fiat money or do they all revert to "a gold standard"

[vinceayre]

Has an economy ever been successful based in fiat money or do they all revert to "a gold standard"

[RoosterMcLooster]

The US has been pretty successful since the 70s. I might not remain preeminent but the its certainly had a long period off success.

Your question is either/or but economies work in cycles. the answer is "yes" to the first part and probably 'yes' to the second part. At some point in the future the dollar might well be backed by something more tangible.

[RoosterMcLooster]

The US has been pretty successful since the 70s. I might not remain preeminent but the its certainly had a long period off success.

Your question is either/or but economies work in cycles. the answer is "yes" to the first part and probably 'yes' to the second part. At some point in the future the dollar might well be backed by something more tangible.

[????]

Isn't what normally happens is a country goes back on the Gold Standard and then some years later comes to the conclusion it's a disaster and goes back to fiat and so it goes on.

[vinceayre]

So then the answer is no country has ever had a successful fiat economy and we will at some point go back to gold, now Gordon has sold it all at historical lows.

[????]

Is it?

[huncamunca]

any central bank will nowadays actively hedge its currency against a basket/ baskets of currencies - the individual currencies themselves may refer, to a greater or lesser extent, on a nominal or implied gold reference valuation

GB did indeed sell Gold, but remember at that time, Gold was an expensive asset to hold - producing little real return with its low lease rates and phenomenal storage costs. A move to a market based curreny stockpile was more indicitative and responsive to pressures and variables in the market

adopting a gold standard is dated and potentially risky - the web of derivatives that are used by corporates and governments make any valuation of a physical somewhat opaque

so yes. and no. and yes. and no.

bottom line, you cannot make a family meal of gold any more than you can from a wad of Euros

innit

bludz

[vinceayre]

H

lol I would be very impressed if you could get Mervyn King to finish his speeches like that

[Huguenot]

Chuckle.

I don't think you could say fiat economies don't work because history demonstrates returns to gold. You could just as easily say gold standards don't work because current experience shows returns to fiat currencies.