Originally posted by check hook
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Now a Dollar Bill, which it seem you are asking about, is a promise to pay a Silver Eagle (with no legal requirement to provide one if so demanded). The only thing backing a Dollar Bill is the faith and confidence of the people of this country in our government and each other to deliver value in exchange for said bill. Since there is only a fixed amount of vInflation due to supply and demand. For example, some huge music star comes out with a clothing line. A shirt that costs the company $10 dollars in materials and labor per shirt is priced retail $150 and people actually buy it because of the name of a famous person is tied to it. The reality of it is, that shirt is not worth the money paid for it but people buy it any way making the dollar depreciate in value.
A simple way of looking at it is, people spend spend spend, making money overly fluid and essentially common. If our economy was more fiscal, the price of things would drop because basically we are forcing the companies to lower prices or no one will buy the item.alue creation, prices for that value produced goes up when the Federal Reserve fulfills its mandate to inflate the money supply by printing more dollar bills. This is called inflation. It's true that inflation is every where and always a monetary phenomenon.
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