Why do people have Faith in currency?

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trustyoursources's picture
Why do people have Faith in currency?

Currency is worthless paper yet the collective believes its valuable. Why does society choose to accept the value of fiat currency? Is it because we are born into it?

My take on the worth of money in detail -
https://youtu.be/K7tMbNEGDXg

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Tin-Man's picture
Personally, I do not trust

Personally, I do not trust our currency at all. Nevertheless, it is currently the only game in town, so there isn't much choice but to go with the flow at the moment. Ever try going into your local Walmart and try paying for you buggy full of merchandise with a basket full of fresh herbs and spices? You should have seen the look on the cashier's face as she tried to figure out which buttons to press on the register to make change. Once she called the manager over, though, I had to get out quick before they called security.

Basically, we use the current money system until it collapses and/or is replaced by a new system. Either way, little to nothing any of us can do about it at my level, so why worry about? Just try to be prepared in case the system does finally go bottoms-up.

SecularSonOfABiscuitEater's picture
Seth McFarlane's "The Orville

Seth McFarlane's "The Orville" addresses this topic really well.

Sky Pilot's picture
trustyoursources,

trustyoursources,

"Currency is worthless paper yet the collective believes its valuable."

Try buying something with a bag full of used toilet paper.

Cognostic's picture
From stones, salt and shells

From stones, salt and shells to money sticks, coins and paper - money is always what a culture agrees upon for bartering. As long as someone else has or makes something that we want, there will be a system of trade.

algebe's picture
We trust money because it's

We trust money because it's the greatest invention in the history of humanity. Money is an imaginary mechanism that allows us to use the value we create through specialized work to buy everything we need. It's a lot better than hunting/gathering or scratching a living through subsistence farming. I see society's acceptance of money as a parallel to morality as a social construct. It works the same way.

But god loves money, too. His earthly representatives are always asking for it. That's odd, because you'd think god would be able to zap up a few billion out of thin air, or make himself the winner of every lottery.

The currency I trust most is the yen, which is the currency I get paid in. It's gone from 360 to the USD until Richard Nixon to around 100 today. And a one-yen coin is made from aluminum, which I think is worth more than 1 yen.

Sky Pilot's picture
Algebe,

Algebe,

"But god loves money, too. His earthly representatives are always asking for it. That's odd, because you'd think god would be able to zap up a few billion out of thin air, or make himself the winner of every lottery."

It is a con.

Proverbs 3:9 (CEV) = "Honor the Lord by giving him your money and the first part of all your crops."

What did God do before money? What does he buy with it? Why does he need the food that you grow?

LogicFTW's picture
@Algebe

@Algebe
"Money" was a very necessary invention, but I would not go as far to say it is the greatest invention in the history of humanity.

I would categorize money as an "IOU" (I owe you.) Cooperative work between humans is very important and people figured out pretty quick, that sharing finished goods in portion of the work, (usually a portion of food grown in a farm back then,) was beset with problems that made it not very practical at times to simply divvy up the end result. And later people realized IOU's beyond the portability and ease they offer (a piece of paper or otherwise stating IOU) is also highly useful in that its representative value did not have to reflect exact value if you give it a number tied to something. (Like gold, or before that perhaps a bushel of wheat, etc) People would use it for other transactions, trading off the IOU's that someone else could eventually collect from the original issuer of the IOU.

The faith in money was once upon a time tied to the faith in a person that issued the IOU to make good on the IOU. Then once IOU's started to go on a more organized "state" level where it was just a general "debt" people did a lot of work to try keep the faith in these IOU's by making them hard to counterfeit. Enter the best technology for this at the time, the malleable metal of gold and using intricate sigils, stamps etc to create a small, portable sturdy item stamped with perhaps a "kings" seal. Currency is born. AFTER that, gold increased in value because the more "gold" a kingdom had that they could "stamp" the more "wealth" they could create more IOU"S out of a metal mined, by leveraging the accepted "these gold goins are real good iou's" backed by a king (or whoever) everyone accepts them! Then the gold rush was born. Before currency, gold had some value as a semi rare resources that was highly malleable so could be used in blacksmithing to create useful items, but it was not really something people would go through great effort to obtain as it had its own flaws and other metals (especially after the invention of alloys) made it replacable in this respect. Silver and copper and many other "rare" resources also filled the role of metal stamped "ious."

Fast forward to the electronic age, and now we have money essentially created out of thin air not even stamped on metal or backed by metal equivalent, money created out of thin air by the government and we all accept it, partially because we have to, partially because we are all so "invested" in this currency. Also partially because the people that have a lot of it, want to protect its value and will go to great lengths to do just that. Money is not longer based on gold just about everywhere, but the faith in currency still generally works, especially something well established like the dollar, or the pound, even the euro.

 
 

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David Killens's picture
I can buy booze with money.

I can buy booze with money. Booze is the ultimate currency when the zombie apocalypse happens.

LogicFTW's picture
I will trade my booze to you

I will trade my booze to you for working guns and ammo :P

I feel ammo will be the ultimate currency in a zombie apocalypse scenario. Ofcourse kind of depends what kind of zombie apocalypse it is. Is it world war z zombies? Is it walking dead type zombies? Or some other hollywood movie zombie type?

LostLocke's picture
"Value" is relative. In our

"Value" is relative. In our system currency isn't worthless, it lets you trade, sell, and purchase things. In another system, currency may be worthless, and something we consider worthless now would be valuable.
It's changed over thousands, if not tens of thousands of years, and will continue to do so well into the future.

Grinseed's picture
Initially "coin of the realm"

Initially "coin of the realm" made trading, buying and selling easier than barter. It provided a common acceptable standard with which to value any service or product. But it also brought the twin evils of inflation and deflation. The ancient Greeks had this problem and not really understanding how it could all turn so sour, simply reverted to barter until the economy sorted itself out. It was the same method they applied to democracy when all parties to society held legitimate demands to limited resources causing internal disruptions. They simply suspended democracy and appointed time-limited tryants to get things back on track. Impossible to do today.

Cognostic's picture
Now that I know money is

Now that I know money is useless, I really feel bad taking advantage of all those prostitutes. I mean. basically, they are doing stuff for little slips of worthless paper.

Grinseed's picture
Don't feel bad Cog, the girls

Don't feel bad Cog, the girls and lady boys took the slips of worthless paper to foolish people who thought they were really valuable exchanging them for intrinsically valuable things like food, shelter and clothing, they could not get any other way, and sometimes not just for themselves but for family and children. You unwittingly served an important social purpose...

Sky Pilot's picture
Grinseed,

Grinseed,

There is a very illustrative story in Genesis chapter 47 about what happened in Egypt and Canaan when the money failed.

Joseph had gotten in good with the Pharaoh and Joseph gave his family some of the best land in Egypt. Then there was a severe famine. Joseph sold the people the grain that he had stored. After a while the people had no more money. Joseph had all of the money but the money failed (the people didn't have any to buy food). Joseph, being a clever guy told the people that he would give them bread if they gave him all of their livestock. The dummies could have eaten the animals but they ended up with no money and no animals. The next year they came again and this time they sold their land and themselves for bread and seed. The people then became sharecroppers. The priests got to keep their land.
https://www.biblegateway.com/passage/?search=genesis47%3A13-26&version=CEV

I think this story illustrates the Tenth Commandment = "don't boil a young goat in its mother's milk."

It also brings to mind the passages from Deuteronomy 8:3 and Matthew 4:4 =

Deuteronomy 8:3 (NKJV) = "So He humbled you, allowed you to hunger, and fed you with manna which you did not know nor did your fathers know, that He might make you know that man shall not live by bread alone; but man lives by every word that proceeds from the mouth of the Lord."

Matthew 4:4 (NKJV) =But He answered and said, “It is written, ‘Man shall not live by bread alone, but by every word that proceeds from the mouth of God.’ ”

The people ended with with no money, livestock, land, or freedom because they gave it all up for bread. The lesson seems to be that you shouldn't lose everything for a short term gain.

Cognostic's picture
Whew! That really does make

Whew! That really does make me feel better.

Grinseed's picture
@Diotrephes, the 'do not boil

@Diotrephes, the 'do not boil a kid in its mothers milk' commandment has always puzzled me, whether it was a mundane dietary direction or a more symbolic kind of advice.
Your take on it, involving Joseph's impoverishment of the people during the famine is interesting. There is some echo of the story of Joseph's grandfather, Jacob, buying the birth right of his older starving and stooopid, brother, Essau, for a bowl of food.

Sky Pilot's picture
Grinseed,

Grinseed,

"the 'do not boil a kid in its mothers milk' commandment has always puzzled me, whether it was a mundane dietary direction or a more symbolic kind of advice."

All of the biblical stories are based on one or more of the Ten Commandments found in Exodus 34:11-28 The miracles are based on Exodus 34:10. That is why it is essential to understand what the real Ten Commandments are or none of the stories will make sense. People who push the fake Ten Commandments in Exodus chapter 20 or Deuteronomy chapter 5 are either plain ignorant or they are being deliberately misleading.

The Tenth Commandment about not boiling a young goat in its mother's milk is hard to understand because it is outside of our normal frame of reference. But any biblical story that can't be clearly linked to one of the other nine Commandments is related to the Tenth Commandment. Basically they illustrate that you shouldn't sacrifice the future for instant gratification.

Most of the biblical stories revolve around the First Commandment. When a person reads the stories he should be able to identify which Commandment the story illustrates and if the person in it is obeying or disobeying the Commandment. Even the Noah story is a First Commandment story. Once a person knows and understand that it doesn't mean that he believes in any of the fairy tale only that he can critically analyze the fairy tale as a piece of complex literature.

Cognostic's picture
Grinseed, I always thought

Grinseed, I always thought it made good sense.

"the 'do not boil a kid in its mothers milk' commandment has always puzzled me, whether it was a mundane dietary direction or a more symbolic kind of advice."

First of all, filling a huge pot full of mommy's milk is next to impossible. You have to have 4 breast pumps and they gotta be working 24 - 7 for weeks at a time. Then when you finally get the pot full of mommy's milk, you gotta catch the kids. Just as you get the milk boiling and you are about to drop them into the pot, mommy goes hysterical "What the fuck are you doing! Give me that child! I wanna divorce!/" It's a real pain in the ass. As far as I am concerned, this is one passage of good biblical advice. The constant bitching and court costs that accompany a violation of this commandment are easily avoided by simply following it.

Sheldon's picture
It's a concept and that faith

It's a concept and that faith is very fragile, currency markets can be extremely volatile and unpredictable. You've heard of the great depression right? Well the collapse of the US economy meant they called in their loans to countries like Germany, the Weimar Republic has rebuilt Germany's destroyed economy, ruined by the folly of the first world war, by borrowing heavily from the US. When the US were forced to recall those loans it destroyed the German currency virtually overnight, the rampant inflation that followed is a salutary lesson in the economic risks of controlling national debt.

The currencies of modern economies are often not underpinned by gold reserves as they once were.

Cognostic's picture
FAITH IN CURRENCY? How

FAITH IN CURRENCY? How does it require faith? I am holding a hundred dollar bill in my hand. I can exchange it for RatSpit snacks at my local market. Where does faith come into the picture? Not sure how you are using the word "faith." If you mean "faith" "The evidence of things that are real." Like Christian faith in the bible. I do not have that.

jay-h's picture
Living in society has many

Living in society has many benefits, but it requires some common shared standards. Language, general rules of behavior, rules of law, are all necessary or the structure of society would collapse. Currency provides a big improvement over barter (you get credit for what you do for one person that you can use to purchase from someone else).

Currency can collapse when the system collapses (re: Venezuela). But usually it's not currency that is the cause of the collapse, it's just a victim of it. Nonetheless most people in the system has a vested interest in keeping the currency flowing.

gupsphoo's picture
I believe in things that work

I believe in things that work.

Money works, because I can buy stuff with it.

God, on the other hand, isn't something I find useful at all.

Foe4500's picture
‘‘Tis simple really.. what

‘‘Tis simple really.. what controls the currency? Banks do, just as the banks of a river control the current of the sea..

Money=Water

Sapporo's picture
I suppose it is reassuring

I suppose it is reassuring that if money suddenly drastically fails as a measure of value, then the rest of society will be just as screwed as I am.

If you are especially concerned about such events, you could hedge part of your net worth into a fund that pays out when various asset classes are doing badly. I suspect that during an all-out nuclear war, this may be of no use whatsoever.

I should probably say that this post does not constitute financial advice etc. etc. and that I hold no such investments myself.

LogicFTW's picture
If faith in a currency

If faith in a currency evaporates, there is not much you can do to hide from it, except invest in a different currency that still has value before the currency you are in goes down.

If the faith in the US dollar evaporates (the current world reserve currency) there is probably almost no where you could hide, global economic meltdown would occur. The only thing you could do is: see it coming and invest in critical survival goods for yourself and those you care about along with powerful means to protect it.

 
 

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I am an atheist that always likes a good debate
Please include @LogicFTW for responses to me
Tips on forum use. ▮ A.R. Member since 2016.
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