Oh my God this is so f-ing true. It makes me think a lot of sociology classes I took in college where we’d talk about the artificiality of money how it’s only meaningful because we have collectively decided it is. The folks who try to make it all scientific with lots of elaborate analytics and complex charts are basically just engaging a social math exercise.
Money is an emotional thing. Do I believe that this coin / bit of paper / number on a website is something that I can exchange for goods and services? If not enough people believe that, that currency will collapse.
Mind you, not using money is inefficient at scale. Sending the bag of potatoes that I’ve grown in my garden this month to my internet provider for continued shitposting privileges only goes so far.
Money is an emotional thing. Do I believe that this coin / bit of paper / number on a website is something that I can exchange for goods and services? If not enough people believe that, that currency will collapse.
That’s not true at all. You know most of the reason why your currency works? It’s not based on tinker bell. It’s based upon the fact that the government collects taxes from you in it. It’s also based upon the fact that other countries will accept it as repayment of debt or face military consequences.
Now, stock prices are mostly irrational – though some companies do actually produce valuable goods and services and own infrastructure – I’ll grant you that. But belief has very little to do with USD being more than green-tinted paper.
Isn’t that a ‘necessary but not sufficient’ condition though? I’m thinking principally of the struggles in Zimbabwe here.
