IDK it really, to me pegging the value to some arbitrary piece of metal seems weirder. If we actually traded real gold and the government decided “hey no, that doesn’t count” you’d be forced to give it back anyway, and they could also force you to do it for no gold. Monetary value only ever had one real source and that’s the person with sufficient force to enforce the trade, which in any stable country is the government.
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baldingpudenda@lemmy.world 11 months agoThe fact that people give money to the US, or any country, for essentially an IOU slip of paper promising to pay you back with interest is so weird.
Speaking of gold reminds me of this sci-fi book where aliens come to earth and cause damage. They ask how they can make things right and are explained gold and the monetary system. They go oh, we can totally filter gold from the oceans and pay you back in tons of gold per day. This caused panic as the huge influx would crash the system. I think it was an asimov short story.
saigot@lemmy.ca 11 months ago
CarbonIceDragon@pawb.social 11 months ago
Funnily enough about that “forced to give back real gold used for trade”, the US kinda did that at one point, making it for a time illegal to possess more than a certain amount of gold and requiring people give anything over that amount to the government for a set price.
SCB@lemmy.world 11 months ago
It’s not weird once you realize that almost nothing has any inherent value if it isn’t food, medicine, ammunition, or fuel.
Gold does not have any inherent value. It has value for the exact same reason money does, only fist currency isn’t prone to the problems a gold standard causes.
theneverfox@pawb.social 11 months ago
Oh, it’s so much weirder than that. When you take a loan, the bank just creates the money based on a percentage of their deposits. Then, they can count that deposit as part of their “real” money. They now have a debt, which does not count against their “real” money
They can then package the loans together, and sell those. This is again “real” money, so can be deposited and used to give out more loans.
But wait! You’re probably thinking “that’s way too simple, let’s run statistics on this!” You’d be right, welcome to the first layer of modern banking.
What happens if a bunch of people can’t repay? Then the bank hides whatever money they can before admitting they can’t make their payments, collapses, and a federal banking system takes over to repackage the assets and loans to another bank (usually without the customers noticing). Or the government writes you a bailout check.
You might think “wait, my constitution says who can print money, why do we have to take loans?” Because they haven’t declassified what happened to the last US president who thought private banks probably shouldn’t be given the monopoly to print money.
What happens if this happens all at once? Well that’s the government’s problem. They can devalue their currency by printing more money or take a loan from the world bank.
Then, you get a bank official that gets to take over your country’s finances. Depending how much the US likes you and how hard you bend over, either you get austerity and they sell off your economic future for a bit more cash now, and you get milked for tax dollars indefinitely, or they cut you a deal, and they give you a way out eventually if you do everything they say.
You might think you could just let the banks fail, but no. That’s how you get an injection of freedom.
You might think about pinning the printing of money to exchange rates or to tax income and managing the banking system socially (since the risk is socialized, why let someone take the profits?), but no. That’s how you get an injection of freedom, comrade.
You should probably stop thinking about other systems before you look a little low on freedom, this is how banking and money work.
SCB@lemmy.world 11 months ago
This is not at all how banking or money works lol
This is like half true, but misremembered, shit and half just insane conspiracy theory.
theneverfox@pawb.social 11 months ago
I was being glib, because I find our monetary system so ridiculous I have to embrace absurdity or it’s upsetting
Obviously the JFK conspiracy is light on evidence, but the entire situation is definitely a conspiracy - something happened, it could’ve been geopolitical or the people keeping tabs on Lee Harvey Oswald really messed up. His story alone is pretty crazy… But anyways, every time I dive into it I find myself leaning more towards it being related to his banking statements than the alternatives, but who knows.
The foreign interventions are mostly declassified though, they’re an absurd read. It wasn’t always the US, but it was always one of the 5 eyes who got involved when alternate systems started to gain traction.
The IMF/World bank piece wasn’t even exaggerated though. Obviously they make it sound a lot more innocent, but I don’t think I even exaggerated this - it’s a legitimate conspiracy working out in the open. It’s truly horrifying. I didn’t even know how it worked until I took an install in a relatively rich Caribbean country (aka big tourist Island with a large “white” population).
It was a tiny contract - I took it to help someone out and see somewhere beautiful, couldn’t have been more than $15k all together - literal hobbiest level gear. It’s not working and I’ve only got a day left to make it work (at least it turns out it wasn’t my fault), and this dude comes up with a big camera like he owns the place, says he’s from the world bank, and starts “politely” asking me to pose for the camera and do an interview about how this will help the country. I have no idea how to answer, I’m sunburnt, this isn’t really my field, and after seeing the computer center has all the computers on dirty blocks because it floods, I genuinely doubt this would be helpful in any situation… It’s basically a backup for if their Internet goes down, but in that case the place is probably flooded anyways
Turns out, the country was getting a pretty big uptick in income from tourism, so the world bank “offered” to fund a bunch of (from my perspective at least) unhelpful infrastructure projects. They’d had decades of austerity before that, their roads were worn out, the power grid was janky, obviously there was seasonal flooding in important places, and although tourism was their main income they didn’t have transportation or hotels… Just bed and breakfasts and a dude I could arrange to give me a ride in the mornings.
So instead of fixing anything critical, they had some plan to build a road straight across the mountain range, with some crazy long tunnel for an insane price and a multi-year time frame.
People were pissed. Their economy was basically government funding allocated by the IMF “recommendations”, which come with the stick of “we’ll pull out and downgrade your credit if you don’t pass this”, and people hanging around waiting for odd jobs from the people on the government payroll.
So the world bank was doing a bunch of little projects that changed nothing, and covering them like the staged rescue effort videos China loves so much.
This felt very weird to me. Google any 2-3 descriptions of the IMF (just read an and you’ll notice they allude to a lot Investopedia, first result, just read the IMF part carefully, then hit Wikipedia if you want to go down the rabbit hole). It’s pretty dark, it’s stuff you’d think was from a century ago, but it’s actively happening still.
So if anything, I think I undersold the reality of that real life conspiracy.
I’d be genuinely interested to know if I was actually wrong about any of this… I’ve found a lot of post-hock justifications why things are the way they are, but to me, monetary systems seem like layers of justifications for an organization too powerful to call them out on it when they cheat. Debt doesn’t produce value when housing prices go through the roof, when you take on credit card/payday debt, or when you get stuck with medical bills… It seems to me like it only works when you take out a loan for a small business, something that used to be big, but now more and more it creates nothing, expands no capability. It just flows upwards endlessly
SCB@lemmy.world 11 months ago
I only got so far as interventions and the IMF but the IMF is not in the US, so your entire point about “bending over for the US” is absurd.
I am generally pro US intervention, especially in opposition to communism.
MenacingPerson@lemm.ee 11 months ago
You’re just saying they’re wrong without any actual argument.
SCB@lemmy.world 11 months ago
Their being wrong is pretty self-evident with even the most cursory of Google.
snooggums@kbin.social 11 months ago
Anything other than direct trade will be based on trust, since even precious metals like gold only hold a certain value because of trust.