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No, the US Dollar is backed by GDP and all USD denominated transactions.
Quote:
Originally Posted by Opin_Yunated
Nope. The U.S. can issue U.S. dollars regardless of if goods and services are produced. In fact, that is exactly what inflates the currency.
So you just contradicted yourself.
You said:
Quote:
Originally Posted by Opin_Yunated
Correct, because debt IS money. If the U.S. debt sheet were to revert to $0, there would be no dollars in existence.
Quote:
Originally Posted by Mircea
Everyone can now see how wrong that is.
So long as you are producing goods and services, you have US Dollars in existence --or whatever currency you're using in existence.
Let's look at specific examples. The figure I used was the GDP for Texas. Suppose Texas was its own independent State, like Zimbabwe:
1,458,300,000 GDP Units / 2,000,000,000 Currency Units = 0.73 GDP/Currency
That's it.
But let's assume the excess currency was generated through government debt, and let's assume that Texas sold $500 Million as treasury securities in the form of bills, notes and bonds.
(1,458,000,000 GDP Units + 500,000,000)/ 2,000,000,000 Texas Pesos = 0.979 or 98% or an annual Monetary Inflation Rate of 2%.
That's pretty damn good.
What happens if the Texas Peso was one of the global reserve currencies and also a global currency in trade?
That increases the amount of Pesos that may be in circulation.
That's what I like about you.
You talk in circles until you step on it.
Quote:
Originally Posted by Opin_Yunated
Hyper monetary inflation is not an issue because we don't print in extreme excess of production. Our economy is so large that scenario is virtually impossible.
I define hyper-Monetary Inflation is any rate which forces a change in the currency.
A sustained rate of Monetary Inflation leads to either a devaluation of the currency or the printing of new currency to reflect new pricing, like this...
Quote:
Originally Posted by Opin_Yunated
Correct, because debt IS money. If the U.S. debt sheet were to revert to $0, there would be no dollars in existence.
Right......if US debt is $0, then we'd all be on the barter system, because, why?
Well, no reason in principle we can't have United States Notes again instead of only Federal Reserve Notes (you know the difference, right?)
It's of no consequence.
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