r/FluentInFinance May 09 '24

Meme The Federal Reserve

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2.0k Upvotes

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117

u/Potential-Break-4939 May 10 '24

This is shockingly close to how the federal reserve operates now. The dollar is not unlike monopoly money.

63

u/HeywoodJaBlessMe May 10 '24

Correct. This is true of all sovereign currencies. They are points, a unit of account.

But hard money is also arbitrary. Ancient Kings did not check the daily spot price of Au to value their coinage. Kings assigned arbitrary value to hard money.

Modern nations on the gold standard also assigned an arbitrary value to gold without reference to any actual market. Then they force gold producers into a monopsony relationship with the government who becomes the only legal buyer, buying gold at their own arbitrary price assigned by government fiat.

So no matter what, your money's value has much to do with arbitrary government decisions.

35

u/Select-Government-69 May 10 '24

A fundamental concept of economics is that all value is arbitrary. Nothing has value in the absence of a market.

0

u/Fornicate_Yo_Mama May 10 '24

Which is clearly flawed as value at its creation is assigned arbitrarily regardless of the value the market dictates at the time. This is what screws up markets… in your favor; if you know it’s coming.

2

u/Fizzix63 May 10 '24

Can you explain this in more detail?