- As promised, here is the other possible interpretation of Mises’ parenthetical statement, which, he claims, destroys every other explanation for the origin of a money. Let’s first quote him again.
…the objective exchange-value of money must always be linked
with a pre-existing market exchange-ratio between money and
other economic goods (since otherwise individuals would not be in a
position to estimate the value of the money)…
You can scroll up to here for one explanation of what he meant.
Here is another, shamelessly copied from what people wrote here a few months ago. And I quote:
JJ: does a money really have to have non-monetary value, and if so, why?
Smiling Dave: It does, because otherwise it’s price, say $17 per bitcoin, is basically a fad. Meaning that’s what people are willing to pay now, but there is no guarentee they will be willing to pay that tomorrow, because there is no reason for that price. Why is the price $17, and not $10, or ten cents?
People sense this, and at some point will start to worry. They will want to unload their bitcoin for something substantial. They will refuse to accept it as payment. Sooner or later, everyone will lose faith in the other person being foolish enough to accept a bit coin in exchange for $17 worth of hard work and tangible goods. They themselves will also not be willing to accept a gamble in exchange for their hard work. The downward spiral will begin.
- Live Free,
You wrote:
If we go back to the great depression when there was a run on banks…
did federal reserve notes lose their status as money…
because people no longer wanted them…?
People no longer wanted them? Then why did they run to the banks? To get free toasters?
Your equation about 2+2=5 is also falacious. Ask someone who knows math.