Pearly,
So, I think your ideas on the worlds best monetary system has been in the direction of a currency backed by some sort of goods. What's your latest ideas...have they changed at all?, or have I misunderstood them??
Anything that comes to be used either as money or as a backing for money experiences an increased demand for that purpose alone, whether or not other uses exist. Because of this, no form of money is immune from a substantial fall in value should it lose its monetary demand. The degree of this fall would approach 100% in the case of fiat money, and probably close to 50% as a minimum for any real commodities.
Since in modern economies virtually all of the exchange value of money is associated with its use as a store of value or future purchasing power, the same thing applies to every other possible store of value. Even if eagle feathers are never used as money per se, their demand, and therefore their exchange value, will rise and fall as people decide, and then undecide, to use them as a store of value.
The only advantage of actual money over other possible stores of value is that money is usually the default choice as a store of value. However, this just means that it is popular and demanded in the present, not that this may no longer be true to the same degree in the future.
Regards, Don |
