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MeisterEckhart

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Re: foundations
Reply #420 - Mar 11^th, 2024 at 6:23pm

thegreatdivide wrote on Mar 11^th, 2024 at 5:58pm:

And irrelvent as far as determining the value of the US currency is concerned, in the post gold-standard era; only interesting to gold traders in the financial-industry casino.

Gold reacts to the strengthening/weakening of the US dollar and almost nothing else. It does not significantly determine the value of the US dollar except by up to maybe 2% in a bull market as we're seeing today.

It is, however, a good indicator of how a world event will affect the US dollar when, say, a war is imminent after a significant event - such as what happened immediately after the Russian invasion of Ukraine and the terrorist attack by Hamas when the gold price spiked upwards.

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Frank

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Re: foundations
Reply #421 - Mar 11^th, 2024 at 7:31pm

thegreatdivide wrote on Mar 11^th, 2024 at 6:14pm:

freediver wrote on Mar 11^th, 2024 at 5:46pm:

What shared belief about the source?

The (delusional) 'shared belief' regarding where the value of a fiat currency comes from - which you can't explain.

Quote:

TGD: You asserted the value of fiat currency is based on shared belief.... how have I completely misunderstood that assertion?

FD: It requires shared belief. If the person you are offering the money to does not believe that your money has any value, then you will not be able to use it.

Your error there: the value of a fiat currency doesn't require shared belief, its value is determined by internal and external macro-economic forces beyond the beliefs of individuals ie the result of the nation's internal productivity and in comparison to other nations' productivity.

A micro-economist like yourself (if you are even that) will apparently have trouble understanding that truth.

Quote:

Let me know if I need to dumb it down any more for you.

(Sigh)...the travails of teaching the ignorant, including people who assert "shared belief determines reality".....

The Masai should print cows.

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freediver Gold Member Offline www.ozpolitic.com Posts: 48833 At my desk.	Re: foundations Reply #422 - Mar 11^th, 2024 at 8:18pm thegreatdivide wrote on Mar 11^th, 2024 at 6:14pm: freediver wrote on Mar 11^th, 2024 at 5:46pm: What shared belief about the source? The (delusional) 'shared belief' regarding where the value of a fiat currency comes from - which you can't explain. Earth to TGD: this is something you invented.
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MeisterEckhart

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Re: foundations
Reply #423 - Mar 11^th, 2024 at 8:21pm

something that affects the value of the US dollar's value and, by that, the price of gold, is speculation on the Federal target rate at upcoming Federal Open Market Committee (FOMC) meetings.

Currently, there is speculated to be a 97% chance the interest rate will remain between 5.25% and 5.5%

But, by the June 2024 meeting, that speculation is currently at 26.1% with 5% to 5.25% at 57%.

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thegreatdivide

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Re: foundations
Reply #424 - Mar 11^th, 2024 at 8:22pm

MeisterEckhart wrote on Mar 11^th, 2024 at 6:23pm:

thegreatdivide wrote on Mar 11^th, 2024 at 5:58pm:

And irrelvent as far as determining the value of the US currency is concerned, in the post gold-standard era; only interesting to gold traders in the financial-industry casino.

Gold reacts to the strengthening/weakening of the US dollar and almost nothing else.

Hoookay....and irrelevent to the value of the US currency, which is a floating exchanhge-rate currency like all modern fiat currencies.

Quote:

It does not significantly determine the value of the US dollar except by up to maybe 2% in a bull market as we're seeing today.

Correct, the value of the US fiat currency is determined mostly by productivity in the US and in comparison with other countries.

Quote:

It is, however, a good indicator of how a world event will affect the US dollar when, say, a war is imminent after a significant event - such as what happened immediately after the Russian invasion of Ukraine and the terrorist attack by Hamas when the gold price spiked upwards.

And the US dollar has more or less maintained its value relative to other fiat currencies.

Are you ready to stop bleating about gold?

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freediver

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Re: foundations
Reply #425 - Mar 11^th, 2024 at 8:23pm

thegreatdivide wrote on Mar 11^th, 2024 at 6:14pm:

freediver wrote on Mar 11^th, 2024 at 5:46pm:

What shared belief about the source?

The (delusional) 'shared belief' regarding where the value of a fiat currency comes from - which you can't explain.

Earth to TGD: this is something you invented. Just another way that you fail to comprehend what others are saying, then convince yourself you can discredit them.

Quote:

Your error there: the value of a fiat currency doesn't require shared belief, its value is determined by internal and external macro-economic forces beyond the beliefs of individuals ie the result of the nation's internal productivity and in comparison to other nations' productivity.

So how are you going to use money to buy something from a person who does not believe that money has any value? Again, I am not talking about exchange rates. I am not talking about nominal prices or inflation. I am not even talking about fiat currency. You do not even understand the meaning of the word value here.

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People who can't distinguish between etymology and entomology bug me in ways I cannot put into words.

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Grappler Truth Teller Feller

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Re: foundations
Reply #426 - Mar 11^th, 2024 at 8:26pm

Frank wrote on Mar 11^th, 2024 at 7:31pm:

thegreatdivide wrote on Mar 11^th, 2024 at 6:14pm:

freediver wrote on Mar 11^th, 2024 at 5:46pm:

What shared belief about the source?

The (delusional) 'shared belief' regarding where the value of a fiat currency comes from - which you can't explain.

Quote:

TGD: You asserted the value of fiat currency is based on shared belief.... how have I completely misunderstood that assertion?

FD: It requires shared belief. If the person you are offering the money to does not believe that your money has any value, then you will not be able to use it.

Your error there: the value of a fiat currency doesn't require shared belief, its value is determined by internal and external macro-economic forces beyond the beliefs of individuals ie the result of the nation's internal productivity and in comparison to other nations' productivity.

A micro-economist like yourself (if you are even that) will apparently have trouble understanding that truth.

Quote:

Let me know if I need to dumb it down any more for you.

(Sigh)...the travails of teaching the ignorant, including people who assert "shared belief determines reality".....

The Masai should print cows.

If they had cows printed on bank notes and used those as a medium of exchange that would work.

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“Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence.”
― John Adams

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thegreatdivide

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Re: foundations
Reply #427 - Mar 11^th, 2024 at 8:31pm

freediver wrote on Mar 11^th, 2024 at 8:18pm:

thegreatdivide wrote on Mar 11^th, 2024 at 6:14pm:

freediver wrote on Mar 11^th, 2024 at 5:46pm:

What shared belief about the source?

The (delusional) 'shared belief' regarding where the value of a fiat currency comes from - which you can't explain.

Earth to TGD: this is something you invented.

Early onset dementia?

YOU claimed people need to have a shared belief in (the value of) a nation's fiat currency, if they want to trade with one another.

But a fiat currrency's value is independent of what people believe it is worth (eg, some people think all fiat currency is worthless); and in any case people can't decide to not use Oz dollars, since the government requires payment of fees and taxes in the nation's currency.

Quote:

]So how are you going to use money to buy something from a person who does not believe that money has any value?

(fallacy of composition?)

You (and I) can't use the state's money in that case, you'll have to suck it up and find a trader who accepts the nation's fiat currency as the medium of exchange.

Quote:

Again, I am not talking about exchange rates. I am not talking about nominal prices or inflation. I am not even talking about fiat currency. You do not even understand the meaning of the word value here.

But the value of money IS the value of the nation's currency based on the nation's productivity, whether under a gold standard or a floating xchange rate regime.

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« Last Edit: Mar 11^th, 2024 at 8:51pm by thegreatdivide »

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thegreatdivide

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Re: foundations
Reply #428 - Mar 11^th, 2024 at 8:35pm

Grappler Truth Teller Feller wrote on Mar 11^th, 2024 at 8:26pm:

Frank wrote on Mar 11^th, 2024 at 7:31pm:

thegreatdivide wrote on Mar 11^th, 2024 at 6:14pm:

freediver wrote on Mar 11^th, 2024 at 5:46pm:

What shared belief about the source?

The (delusional) 'shared belief' regarding where the value of a fiat currency comes from - which you can't explain.

Quote:

TGD: You asserted the value of fiat currency is based on shared belief.... how have I completely misunderstood that assertion?

FD: It requires shared belief. If the person you are offering the money to does not believe that your money has any value, then you will not be able to use it.

Your error there: the value of a fiat currency doesn't require shared belief, its value is determined by internal and external macro-economic forces beyond the beliefs of individuals ie the result of the nation's internal productivity and in comparison to other nations' productivity.

A micro-economist like yourself (if you are even that) will apparently have trouble understanding that truth.

Quote:

Let me know if I need to dumb it down any more for you.

(Sigh)...the travails of teaching the ignorant, including people who assert "shared belief determines reality".....

The Masai should print cows.

If they had cows printed on bank notes and used those as a medium of exchange that would work.

(if cows were the only source of wealth in the economy)

A correct statement from graps - amazing. (Possession of) the notes are only a record of debts and credits (in cows).

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« Last Edit: Mar 11^th, 2024 at 9:12pm by thegreatdivide »

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freediver

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Re: foundations
Reply #429 - Mar 11^th, 2024 at 8:39pm

thegreatdivide wrote on Mar 11^th, 2024 at 8:31pm:

freediver wrote on Mar 11^th, 2024 at 8:18pm:

thegreatdivide wrote on Mar 11^th, 2024 at 6:14pm:

freediver wrote on Mar 11^th, 2024 at 5:46pm:

What shared belief about the source?

The (delusional) 'shared belief' regarding where the value of a fiat currency comes from - which you can't explain.

Earth to TGD: this is something you invented.

Early onset dementia?

YOU claimed people need to have a shared belief in (the value of) a nation's fiat currency, if they want to trade with one another.

As I have explained several times already, it requires a belief that it has value. It does not matter where the value comes from, or where they believe the value comes from, or whether their individual beliefs are identical or have a sound basis. Can you see the difference?

This is about as dumbed down as it gets, so try answering this question rather than ignoring it: how do you use money to buy something from a person who does not believe that your money has any value?

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People who can't distinguish between etymology and entomology bug me in ways I cannot put into words.

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thegreatdivide

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Re: foundations
Reply #430 - Mar 11^th, 2024 at 8:56pm

Frank wrote on Mar 11^th, 2024 at 7:31pm:

thegreatdivide wrote on Mar 11^th, 2024 at 6:14pm:

freediver wrote on Mar 11^th, 2024 at 5:46pm:

What shared belief about the source?

The (delusional) 'shared belief' regarding where the value of a fiat currency comes from - which you can't explain.

Quote:

TGD: You asserted the value of fiat currency is based on shared belief.... how have I completely misunderstood that assertion?

FD: It requires shared belief. If the person you are offering the money to does not believe that your money has any value, then you will not be able to use it.

Your error there: the value of a fiat currency doesn't require shared belief, its value is determined by internal and external macro-economic forces beyond the beliefs of individuals ie the result of the nation's internal productivity and in comparison to other nations' productivity.

A micro-economist like yourself (if you are even that) will apparently have trouble understanding that truth.

Quote:

Let me know if I need to dumb it down any more for you.

(Sigh)...the travails of teaching the ignorant, including people who assert "shared belief determines reality".....

The Masai should print cows.

Yes, to keep a record of debts and credits in the mono-agricultural economy (cows) - the earliest form of 'money'.

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thegreatdivide

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Re: foundations
Reply #431 - Mar 11^th, 2024 at 9:09pm

freediver wrote on Mar 11^th, 2024 at 8:39pm:

thegreatdivide wrote on Mar 11^th, 2024 at 8:31pm:

freediver wrote on Mar 11^th, 2024 at 8:18pm:

thegreatdivide wrote on Mar 11^th, 2024 at 6:14pm:

freediver wrote on Mar 11^th, 2024 at 5:46pm:

What shared belief about the source?

The (delusional) 'shared belief' regarding where the value of a fiat currency comes from - which you can't explain.

Earth to TGD: this is something you invented.

Early onset dementia?

YOU claimed people need to have a shared belief in (the value of) a nation's fiat currency, if they want to trade with one another.

As I have explained several times already, it requires a belief that it has value.

Again - your incorrect assertion.

It requires productivity, not belief.

Quote:

It does not matter where the value comes from, or where they believe the value comes from, or whether their individual beliefs are identical or have a sound basis. Can you see the difference?

The first sentence there is wrong: you can't have value without productivity.

Quote:

This is about as dumbed down as it gets, so try answering this question rather than ignoring it: how do you use money to buy something from a person who does not believe that your money has any value?

Addressed earlier - you can't trade with a person who doesn't accept the nation's fiat currency (can you find ONE such person?).

Write one hundred times: productivity, not belief, determines value.

Then maybe we can lift the discussion's IQ rating....

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« Last Edit: Mar 11^th, 2024 at 9:16pm by thegreatdivide »

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thegreatdivide Gold Member Offline Australian Politics<br /> Posts: 12480 Gender:	Re: foundations Reply #432 - Mar 11^th, 2024 at 9:13pm .
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thegreatdivide Gold Member Offline Australian Politics<br /> Posts: 12480 Gender:	Re: foundations Reply #433 - Mar 11^th, 2024 at 9:30pm Here's an equation for FD (who obviously needs assistance): productivity = resources + know-how + labour = wealth. Note the term 'money' is not present, because the "value" of money - money being merely a convenience to record transactions - is determined by the nation's productivity ie resources + knowhow + labour.
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MeisterEckhart

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Re: foundations
Reply #434 - Mar 11^th, 2024 at 9:34pm

thegreatdivide wrote on Mar 11^th, 2024 at 8:22pm:

Are you ready to stop bleating about gold?

The current theme of this thread is about what money is.

Precious metals (particularly gold and silver) fit the required definition to have intrinsic value, and making them candidates for being money.

Whether they have intrinsic value is an ongoing debate among bullion dealers and crypto spruikers.

One thing's for certain: gold is a medium of exchange because it is widely accepted as being valuable in itself, and has been for thousands of years. That belief alone is the foundation upon which the claim of its having intrinsic value is based.

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