Reply to post: Re: Agreements

Re: Agreements

"FIAT has value as a representation of human activity and how it can be exchanged: 4 hours of person X costs Y and Y can be then used to purchase something entirely different.

But that representation is come to by common agreement."

Quite right. But gold, one of the reserve metal standards in human financial trading (the other is silver), only has a value due to the fact that the humans have come to this belief by common agreement.

Rhodium, palladium, ruthenium and platinum - the platinum metals group - are ALL rarer than gold. Yet we do not use them as a reserve metal, completely destroying the belief that we use gold due to it's "rarity".

Gold is not actually that rare, compared to many other items on planet Earth. But we have granted gold a special status: human, by common agreement, have decided that gold is 'unique' and worthy of an exchange value that is higher than its actual physical properties demand of it. And we then decide to lock the values of our varied exchange tokens - money - to its 'inherent worth'.

But what inherent worth does gold really have? If we had a comic strike-caused nuclear winter next week, will your 3 pounds of gold reserves keep you alive? Only as long as other humans are willing to accept your gold in trade for things that you will actually need, water, food, shelter. But if there is no more world economy, if survival-level life is all that there is, what good is gold?

Nothing. It's worth, nothing.

Yet, humans hoard, cherish and declare it worthy of special treatment.

The idea, the theory, of FIAT currency is that the trusted output of human endeavors, labor, can and should be valued at the same level as a [seemingly] randomly-chosen metal. And, if it is, we can assign a monetary trading value to that trust. Therefore, the trust can be traded, the trust can be assigned a worldwide reserve value.

The concepts are not that great of a leap. But old-fashioned people wish to hold something in their hand that they can consider "worth", ironically whilst they expect other humans to hold their personal worth in balance during any interaction. For example, they expect to be hired at a pay scale before they ever output a single work-hour of labor to the employer, based upon an assessment of personal worth to said employer. They are trading their own FIAT personal worth, that their prior work is worth a comparison to their promised work, and expect fair trade for this before the work for the future has even begun.