Saw this in the Economist this month. The Somali shilling issued by the central bank which collapsed in 1992 is still being used as currency in the failed state. The people will convert them to dollars if they are trading with other countries. Pretty interesting that a "worthless" currency still has value. Just tradition? Or is it just easier to believe in it than use a foreign currency or return to a barter system? The money is regarded well enough that counterfeits are still being made.
Thomas Sowell: There are no solutions, just trade-offs.
FredHayek wrote: Saw this in the Economist this month. The Somali shilling issued by the central bank which collapsed in 1992 is still being used as currency in the failed state. The people will convert them to dollars if they are trading with other countries. Pretty interesting that a "worthless" currency still has value. Just tradition? Or is it just easier to believe in it than use a foreign currency or return to a barter system? The money is regarded well enough that counterfeits are still being made.
Fred... the value of currency is psychological. If it has been used as trade for 20 years, no matter if it is backed by a central bank or government, it has value because it is under gridded by commerce. That's like Economics 101 (which I never took). Read Neal Stephansons 3 book series commonly knows as "The Baroque Cycle." It will teach you everything you want to know about the movement of currency (value) and information (trade) and how it shaped the world, all in a swashbuckling fictional history of 1625 through 1725.
Read Snowcrash and another of his books. Good author goes all over the place but in amusing ways. Just thought the people who believe paper money has no value are incorrect.
Thomas Sowell: There are no solutions, just trade-offs.
FredHayek wrote: Read Snowcrash and another of his books. Good author goes all over the place but in amusing ways. Just thought the people who believe paper money has no value are incorrect.
Well then you needed to connect your first thought to your second thought and let everyone else know what you were thinking, because I had the WHOLE family come over to the computer and try to decipher what your point was... and there were crickets.
