An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
I was a graduate student at SU when Doug was on staff there. I can honestly say I really think he's become nothing more than a paid shill for the right.
A fiat currency is backed by taxes. Credit money is backed by collateral. Most modern economies run mostly on credit money, so the predominant backing is collateral.
ok, but that doesn't really explain why foreigners want dollars so much, why the dollar is the dominant reserve currency, why oil is sold in dollars, etc.
Generally speaking, the currency of the most powerful and prosperous country serves the reserve since it is regarded as the safest financial asset to hold.
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I was a graduate student at SU when Doug was on staff there. I can honestly say I really think he's become nothing more than a paid shill for the right.
I think the dollar is "backed" by more than just taxes personally.
Good video though.
A fiat currency is backed by taxes. Credit money is backed by collateral. Most modern economies run mostly on credit money, so the predominant backing is collateral.
ok, but that doesn't really explain why foreigners want dollars so much, why the dollar is the dominant reserve currency, why oil is sold in dollars, etc.
http://en.wikipedia.org/wiki/Monetary_hegemony
Generally speaking, the currency of the most powerful and prosperous country serves the reserve since it is regarded as the safest financial asset to hold.
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