What gives "A Dollar" value ?

[rbarn]

I was watching a little YouTube clip where 4 people running for some small public office were having a mild question and answer session.

Someone asked the very simple question of "What gives a dollar value ?"
None of the guys sitting up there could really give an answer beyond the typical "the good faith and credit of the U.S. government" which is not correct.

Let me hear what you guys think gives a Dollar value and then I will clue y'all into what really makes our money worth something.

[Disgirl]

It is backed by gold at Ft Knox, or used to be anyway...???
Barb

[Second Hand Pat]

Barb, it use to be.

[mmorris]

Let me hear what you guys think gives a Dollar value and then I will clue y'all into what really makes our money worth something.

Well, let's see...the international exchange of petroleum...woops...Euro... Speculation? World Bank debt? The question is a bit vague, because value is undefined. You clearly don't think we will give you the answer you will give, so have at it! Your analysis is pretty good! Your solution leaves something to be desired.

[rbarn]

Ok guys a Dollar's value at it's most simple fundamental is based on the human labor that was used to earn it.
A Dollar is a claim on human labor. Either past or future. If you earned it then someone paid you for past labor or if you save it as a store on someone else's labor you will trade with in the future

The Dollar is backed by We The People. But not by the Government. It's backed by our willingness to accept it for our labor and others to do the same. Get it ?

Now think about this. If the Dollar and national debt accumulated in these dollars is a claim on future labor, then you have to stop and think about the moral implications of passing these "claims on human labor" down to the next generation that had nothing to do accumulating them. When someone is born into a system that demands their labor there is another word for this -- slavery.

Our world today is full of incorrect definitions. When you correctly define what exactly a dollar really represents the implications of running up massive debts (both public and private) that you fully intend to pass on to your children and their children you start to understand the true immorality of how we are running our lives and our country.

You also start to see the immorality of the Federal Reserves actions in debasing the value of the dollar. Because they are not debasing the value of piece of paper, they are debasing the value of YOUR labor. This is theft. Plain and simple. It messes up our whole system of how we measure our worth and value to society as a whole. They basically cut your pay while demanding the same labor.

Some food for thought.

Well, let's see...the international exchange of petroleum...woops...Euro... Speculation? World Bank debt? The question is a bit vague, because value is undefined. You clearly don't think we will give you the answer you will give, so have at it! Your analysis is pretty good! Your solution leaves something to be desired.

The Petro-dollar, exchange rates, interest rate manipulation and speculation are just different ways for them to manipulate the value of our labor without us realizing what they are doing. They know what they are doing and the implications of it. They just pray they you never understand this very simple concept, because it tends to make people angry when they are stolen from or have their hard labor squandered.

It is backed by gold at Ft Knox, or used to be anyway...???
Barb

What gold ? No one has been in that vault since 1953. And no the Dollar is not redeemable for gold anymore. Nixon stopped that in 1971 when everyone was rushing to trade in their Dollars flooding out into the international markets from our trade imbalances. But even beyond that. Gold itself is still just a claim on human labor and way to store that claim. Gold is just harder for them debase and manipulate.

[Cosmo]

There are really two things that give the dollar value, neither of them is tangible, or, unfortunately for us, necessarily permanent

The official response is that it is backed by the full faith and credit of the United States government. This USED to mean something until 10 years or so ago but now, with our out of control spending and debt, means nothing at all. SO

The ONLY thing that gives the dollar value is the fact that it is still the worlds "RESERVE CURRENCY". In other words, all transactions between governments (not just oil and petro dollars - although that is a big part of it) must be done in US Dollars, or, as they are know internationally, USD. Consequently, all governments MUST hold large amounts of dollars to engage in any international trade.

There is every reason to believe, however, that the days of the USD as the worlds reserve currency are coming rapidly to an end. Already, several countries such as China, Russia, Iran and others have made inter-country deals where they exchange their own currency rather than dollars. The Chinese and the IMF (international monetary fund) are speaking openly about replacing the dollar with a more stable currency, or, a basket of different currencies. The IMF is proposing using their "credits" (I can't recall the name of them) that they issue to countries they loan money to. This would make the IMF the holder of the worlds reserve currency, and one of the most powerful institutions on earth.

The Chinese are aggressively pushing to have their own currency, the YUAN as the worlds reserve currency. In fact, they are currently buying up so much gold that there is speculation that they will back their YUAN with GOLD, much like the US and other countries used to do. This would make the Chinese the issuer of the worlds reserve currency and propel them to world dominance.

What does losing the distinction of the dollar as the world's reserve currency mean to the US? A catastrophic downgrade in our standard of living as the dollars that are in circulation would become worthless virtually over night. banks, grocery stores, even utilities would probably be forced to close since no one would want our dollars any longer. The dollar would become so devalued that It would take a bushel bull of dollars to buy a YUAN, or a loaf of bread. The US economy would die.

Overstated you think? Buy gasoline, or go to the grocery store, or buy clothing. EVERYTHING is already becoming more expensive as the value of the dollar falls. Remember the US economy has been kept afloat the past 4 years by BORROWING TRILLIONS, and PRINTING TRILLIONS. This had inflated the supply of money which is already leading to inflation - soon to become hyper inflation. (Remember, the US dept of labor DOES NOT include food prices and energy prices when calculating the consumer price index - that is the ONLY reason inflation remains invisible!) THEN, Without the status of reserve currency, the US could no longer print or borrow trillions and the economy would stagnate over night. Hyper inflation such as hit Weimar Germany after WWI will hit the US, and your dollars will become worthless.

Unfortunately, the loss of the USD as the worlds reserve currency is virtually inevitable, and current political posturing is only making matters worse. Buy gold, food, and guns/ammo to protect yourself and your loved ones when (not if) the dollar becomes worthless. When it happens, it will happen very very rapidly.

Gloomy I know, but better prepared than caught off guard

[LizStreithorst]

Good shoes (as I say on DaaH) Jim. Too gloomy for me. I live in the country. Everything might fall apart, but I will survive.

[rbarn]

Cosmo,

You are thinking about what gives a dollar value within the current monetary system. I'm talking about a much more fundamental and basic level. At it's very root base the dollar is how we value our productive labor. We put in a hard days work, and then value that labor in the pay we want in compensation. We then use that money to pay other people for their labor.

The point is you have to look at debt and money as what it truly is .... a claim on someones labor. ..... Then you have to take a huge step back and think about the morality of passing on debt to people that had nothing to do with acquiring it. ... These are the conversations and lines of thought We The People need to understand in today's world of out of control consequence-less spending sprees.

Everything might fall apart, but I will survive.

Everything WILL fall apart. Our entire economic and monetary system is based upon perpetual growth to infinity.

Ayn Rand said it best.
"You can ignore reality but you cannot ignore the consequences of ignoring reality"

Make no mistake we are about to learn what the consequences are of running "unsustainable debts" for 50 years. The whole world is about to find out. Should be an interesting ride. I think it's exciting rather than gloomy. We are living through history right now. The Internet Reformation is bringing the world and individuals together like never before. This is the death of the current power and money system. And it cant come too soon for me.