Wealth isn't.
Herm? Can you explain? I dont really understand what you are talking about.
There's only a fixed amount of goods in the world. No matter what you base your monetary system on, the money must be exchangeable for goods, otherwise it's just painted piece of paper.
Gold standard works by assigning a certain number of coins/paper money to a certain amount of gold it can be exchanged for, provided nobody would ever ask to do that, and when you buy a product, you are exchanging the promise of getting a certain amount of gold (again, the promise hinges on nobody really asking for it to be fulfilled) for a product, say, an apple.
Fiat money works on, essentially, a promise that for this amount of colored papers you can get another product, so you are essentially exchanging a promise of a product of the sellers choosing in exchange for the sellers's product.
If the money was based on gold standard, she'd need more gold than there is in the world, so obviously nobody would be able to provide enough.
Since it's fiat money, she would essentially have a claim on all the world's wealth, and US government would be, by implication, backing up her claim. Also, you'd need to print way more money. But since money represents a fraction of US wealth, printing more money does not create wealth, but dilutes how much actual wealth the money represents.
So if you increase the money supply, with no wealth to back it up, you have to decrease how much the money is worth.
So very soon, you'd have a second Zimbabwe.
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Topic: Things that made you go "WTF?" today o_O (Read 14445430 times)