*Opinion* What comes first, supply or demand?

Boom. Should be end of thread.

 

Before I respond, you need to define failure in the context of a currency. This feels a lot like a tautology, but I'll judge after you give me your definition of failure with respect to currencies.

Also, you talk about currency failure and government failure. These are not mutually inclusive. It is possible for a currency to no longer serve the purpose for which it was created and be replaced without the government failing.

Example

 

I know you addressed this to @TedintheShed , but my answer would be when people no longer value it.

 

Perfect, let's see if he agrees.

 

100% gibberish since there is no history really. Friedman didn't write monetary history of USA till mid 20th century so we have only 70 years experience. USA has fiat currency and 130 million smart phone super computers so things look good indeed!. Do you understand?

 

Agreed. Hence the phrase "not worth a Continental".

Question: Why did continentals become worthless?

 

fiat currencies after Friedman may last forever. Most of the fiat blabbering is 1930's Austrian stuff that was popular long before it was displaced by Friedman

 

Given the choice, people prefer market money (commodity money) to fiat money. That's the reason why fiat money must be implemented at bayonet-point.

 

well not really sure about that. If a guy has gold in the bank he will mostly take the bank's paper money in place of the gold rather than carry around his heavy bulky gold.

 

Bank notes aren't fiat money.

 

Why?

 

eventually it is, as they find more and more uses and people forget about the gold. There was a time when they shipped gold across the ocean,then they moved the gold to a different safe, then to different part of the safe instead, and then they just accounted for the ownership on paper and never moved the gold and lost track of whose it was.. Fiat currency managed for no inflation is probably better than gold, and the only choice anyway since no one is talking about gold.

 

why at gun point? because people know gold has value and liberal money may not

 

I'm not sure about the relevance of that question to economics. Economics is positive, not normative.

The evidence is that people prefer market money to fiat currency.

 

Gold today is selling at $1,278.13 an ounce.
A 20 year old is given a choice of placing $127,813 in cash or 100 troy ounces of gold in a vault which will be opened and given to him/her in 40 years time. Which would be the better choice?

 

The gold.

 

not for me I already lost on Gold.

 

That's the beauty of the free market. Everyone invests in what they want.

 

A pork yielding politician, for example?

 

At the risk of sounding redundant, why do people "prefer market money to fiat currency."?

 

So gold is better because it's good for savings?

 

Suppose the choice was between a $100 gold coin and a $100 paper bill to be retrieved 40 years later?

 

Because, given the choice, people prefer sound money.

 

That's not an answer to the question "Why?"

Why do people prefer to hold "sound" money?

Who are these "people"?

Implicit in your statement is that US dollars are "unsound" and therefore I can deduce, based on what you said, people don't like to hold US dollars.

What is unsound about US dollars? I can purchase virtually anything I want with them including "sound money". Looking at Ndividuals question, if I wanted to hold onto my money for 40 years, I could just trade my dollars for gold and accomplish the exact same thing.

 

Sure, but you are looking at money only as a store of value.

Let me turn this around on you...

If you were going to take out a $10000 loan for 40 years (let's say the entire balance is due in 40 years), would you rather take it in gold or dollars?

Toche my friend.