Stack Exchange network consists of 177 Q&A communities including Stack Overflow, the largest, most trusted online community for developers to learn, share their knowledge, and build their careers.. Visit Stack Exchange Visit Stack Exchange The paper is worthless by itself, but because the chance to farm in this kingdom has value and you can't farm there without some of those papers, the papers gain value. Access to the economy of the country that issued it, as well as any satellites of that dollar economy.Of course, once more than a certain amount of gold coins circulates, gold coins in effect become a fiat currency, because the lord can only trade for so much gold before he run out of goods and there are only so many neighboring lords to try. … Visit Stack Exchange It's just shiny metal that's too soft to be made into tools and frankly too heavy to lug around.Now let's imagine a different kingdom. We make Stack Overflow and 170+ other community-powered Q&A sites. Does gold really have value? It would not survive a 'run on the bank' where everyone tried to cash out their gold coins at once.Imagine you had a million dollars in gold coins, then all world governments and organizations vanished overnight. Indeed they now use the papers among themselves as a unit of value and even ask for it from outsiders — Those who wish to buy goods from those in the fertile kingdom now must obtain the paper its citizens value, which only makes the paper more valuable.The reason a gold coin had value in the past was that, somewhere in every province was some powerful lord who had more food then he could ever eat, a big castle over his head and many guards with swords who knew how to deal with wild dogs. And with all of his needs well met, this lord could afford to trade some of his excess food or wood or swords for a pretty piece of metal to decorate his head with. So people used those gold coins in trade, because they knew that they could cash them out into something of true value (by trading with the lord of the castle), if they couldn't find someone that would accept them as a currency.Let's examine the idea that gold-backed money has value because gold has value. Q&A for information security professionals.
In this new Mad Max world, do you think you could walk over to your neighbor and buy some of his food with gold? After all what use is gold to him? So what's the value or promise of a fiat currency?
So while this 'backing' of the gold currency existed it wasn't that robust.
He can't eat it, it won't protect him from the rain and it won't scare off wild dogs. Stack Exchange network consists of 177 Q&A communities including Stack Overflow, the largest, most trusted online community for developers to learn, share their knowledge, and build their careers. Stack Exchange network consists of 177 Q&A communities including Stack Overflow, the largest, most trusted online community for developers to learn, share their knowledge, and build their careers. People are willing to trade goods in exchange for these papers because then they can then can take a share of those fertile lands for a year. This kingdom has fertile land and is protected from invaders because of the king's wise policies. We make Stack Overflow and 170+ other community-powered Q&A sites. However, in return for the use of the land, the king demands a yearly payment that can only be made using pieces of paper with the king's face stamped on them. Worldbuilding Stack Exchange is a question and answer site for writers/artists using science, geography and culture to construct imaginary worlds and settings. We make Stack Overflow and 170+ other community-powered Q&A sites. Thus many farmers flock there to enjoy its bounty.
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