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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (16343)	11/19/2004 5:48:10 PM
From: GraceZ	Respond to of 116555

All forms of money, whether fiat or commodity are subject to "confidence" in their value. A gun to the head has never been sufficient for a currency (or commodity) to hold value. since the currency forms the basis for a fractional reserve banking system, it is far more vulnerable than people generally think. This was true in the gold backed days as well since we never had a pure commodity based monetary system, there were notes and fractional lending is as old as civilization. Back in the gold backed days the notes were backed by the bank that issued them, now they are backed by the full faith and credit of the United States. Frankly, I'll take the latter. A very old argument and it precedes the establishment of the Federal Reserve: cdl.library.cornell.edu