E-money is the ultimate form of Fiat if you ask me. All fiat has a history of corruption and collapse (the american dollar and other world currencies are heading that way as well). Fiat money is the money of the statist, since it allows those in charge of the press to create as much money as they need, while dilluting what the rest of us hold.
The question isn't "what form will money be in", the question should be "what assets will back our money". I don't care if its in the form of rice crispies, as long as it is backed by an asset (gold, food, land, space rocks) and has real value.
Lets look at the currency called the American Dollar.
It is no longer backed by gold, as you said. Instead, it merely is backed by a promise that it is worth something. How is this different from a gold-backed currency like the old American Dollar. Well, since the old dollar did not actually come attached to a piece of gold and in fact was not even exchangable for gold it's last 40 years.
So, what is the difference between the two? Little. Both are backed by promises. The only difference is what the promise is. If you cannot trust the US to back the current dollar, why could you trust them to back the old one, in the absence of proof that it is equivalent to gold?
With E-Money, you have to trust the issuer that they exchanged real money for it and did not just "print it". Do you trust them?
The idea of a gold backed currency is not that people go to the bank and come home with a sliver of glod - its about value stability. Each nation backing their currency with gold is required to hold said amount securely, providing a basis for currency trade.
Since movng from the gold standard the dollar has lost, what, 75% of its value? What has followed is one crisis after another. LTCM. Russia. Peso Crisis. Thailand. Argentina. Actually the crises have been happening about every twenty four months. How many similar crises occurred under the gold standard??
The premise of a gold-backed currency is that some things have more lasting value than nation states. Gold is one of them - for five thousand years it has represented wealth and traded as such across cultures.
What is BEHIND that money... that is the question. (Score:5, Interesting)
E-money is the ultimate form of Fiat if you ask me. All fiat has a history of corruption and collapse (the american dollar and other world currencies are heading that way as well). Fiat money is the money of the statist, since it allows those in charge of the press to create as much money as they need, while dilluting what the rest of us hold.
The question isn't "what form will money be in", the question should be "what assets will back our money". I don't care if its in the form of rice crispies, as long as it is backed by an asset (gold, food, land, space rocks) and has real value.
you have a shallow understanding of the issues (Score:0)
It is no longer backed by gold, as you said. Instead, it merely is backed by a promise that it is worth something. How is this different from a gold-backed currency like the old American Dollar. Well, since the old dollar did not actually come attached to a piece of gold and in fact was not even exchangable for gold it's last 40 years.
So, what is the difference between the two? Little. Both are backed by promises. The only difference is what the promise is. If you cannot trust the US to back the current dollar, why could you trust them to back the old one, in the absence of proof that it is equivalent to gold?
With E-Money, you have to trust the issuer that they exchanged real money for it and did not just "print it". Do you trust them?
This is one of the largest obstacles for E-Money.
WRONG! That is not how gold back currencies work (Score:2)
Since movng from the gold standard the dollar has lost, what, 75% of its value? What has followed is one crisis after another. LTCM. Russia. Peso Crisis. Thailand. Argentina. Actually the crises have been happening about every twenty four months. How many similar crises occurred under the gold standard??
The premise of a gold-backed currency is that some things have more lasting value than nation states. Gold is one of them - for five thousand years it has represented wealth and traded as such across cultures.