Gyroscopic Investing

Pointedstick wrote:

Mdraf wrote: No. The value in this case will be set by the inhabitants. I'll give you 1 New Token for your Toyota. Are you nuts? I want 15 New Tokens. Etc

Addendum: but this is not reality. I can't think of an example where government simply gives out currency.

Right. The actual exchange rate and precise value is determined by the private sector. But the fact that I don't think it's nuts that you're even offering me these worthless pieces of paper marked "New Tokens" for my extremely valuable Toyota is what the government accomplishes. It ensures that we all want to have some amount of these dumb pieces of paper saying, "New Token" on them by threatening us somehow if we don't have enough.

Mdraf wrote:So my point goes back to the fact that there needs to be value, or a means to measure value.

Gumby wrote:

Mdraf wrote:So my point goes back to the fact that there needs to be value, or a means to measure value.

What about (paleolithic) tally sticks?

http://en.wikipedia.org/wiki/Tally_stic ... lly_sticks

The sticks weren't valuable in terms of raw material (they were tokens), but they represented credit in a society. 'Money' has been debt-based for eons.

And didn't King Henry I set up a tally stick system? They weren't backed by anything and they lasted for centuries.

Mdraf wrote:

Gumby wrote:

Mdraf wrote:So my point goes back to the fact that there needs to be value, or a means to measure value.

What about (paleolithic) tally sticks?

http://en.wikipedia.org/wiki/Tally_stic ... lly_sticks

The sticks weren't valuable in terms of raw material (they were tokens), but they represented credit in a society. 'Money' has been debt-based for eons.

And didn't King Henry I set up a tally stick system? They weren't backed by anything and they lasted for centuries.

I would say those are simple accounting books keeping track of OTHER goods of value being exchanged among people.

Mdraf wrote: Yes and no. That's one reason but the other reason in my opinion more powerful is that when the Tokens are in fact accepted by more and more players the Token becomes fungible and you can use it to buy a burger or a condo. Now if you have a Very Valuable Token (US$) you can buy a house in Greece.
But if you have a Crappy Token (North Korean Token) you want to buy a house in Greece, the owner will say "How many dollars is your Crappy Token worth?"

And so WHY is the US$ better than the North Korean Token?

Mdraf wrote:

Gumby wrote: And didn't King Henry I set up a tally stick system? They weren't backed by anything and they lasted for centuries.

I would say those are simple accounting books keeping track of OTHER goods of value being exchanged among people.

moda0306 wrote:

Mdraf wrote:

Gumby wrote: If you have a disagreement, why don't you clarify what it is? I don't believe I said anything factually incorrect, but please correct me if you think I did.

I shouldn't have opened the new tangent about tearing up bonds. We can get back to that later.

The disagreement relates to The Beginning. For the government to issue debt in a currency there has to be a value attached to that currency.  At first the dollar was issued and it was worth $xx.00 of gold. Then it was accepted and became a means of exchange. Only because people believe that they COULD get the gold if they wanted to. Once the currency is accepted as a means of exchange (eg. $100 = 100 hamburgers, or $100 = 10 goats) then government can go ahead and unlink it from the original value setter.

If a country declares independence and issues its own currency they will link its original value to another currency which people have faith in.  They cannot issue a new currency as say One New Token = 100 Zimbabwe dollars.

So my point goes back to the fact that there needs to be value, or a means to measure value.

But you don't need the value... remember my example of the fiat dollars and the "tax" that needs to be paid in those worthless pieces of paper is going to make them valuable.

I believe this was done with English currency in Africa when they were colonizing it, and the Africans had no concept of currency.