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Politics : Liberalism: Do You Agree We've Had Enough of It? -- Ignore unavailable to you. Want to Upgrade?

To: tonto who wrote (130978)	4/23/2012 7:30:11 PM
From: TimF	1 Recommendation Read Replies (1) \| Respond to of 224748

The backing is important because without it people won't accept it, but that's an indirect importance. If everyone would start accepting those tokens, and give you real goods and services for them, and they in turn could get goods and services for them, then they would effectively be real money, no matter that they aren't backed by anything. Backing also is relevant in terms of limiting the supply of money. Fiat currencies like the dollar or your tokens, could be made in virtually unlimited numbers (even more so if you don't have to physically produce them and can just credit accounts electronically with the amount), but until and unless you get hyperinflation the tokens could be "real money". One will not accept a currency if it is not backed. If you think your US dollars are worthless I'll be happy to take them off your hands <g> The US dollar is not backed by anything (other than "the faith and credit of the United States", or more specifically trust in the fed), but it holds its value better than Zim dollars because while the Fed might be somewhat willing to inflate they are more responsible than Mugabe.