History proves you wrong. Look at the Depresson.

So does the current economic situation in the US. The dollar is shit right now and is almost worth as little as Canadian money. Europeans come here to do their cheap shopping!!

Now take a look at Mexico. Their money isn’t worth much to anyone and yet they still have a government that’s in control…as corrupt as it is.

The money is one of the first things to go when a nation comes apart.

You also ignore the fact that the US Government isn’t just going to close up shop and say “we’re done”. No, in order for the government to come apart there has to be a LOT of crazy shit happening on a national level for a long time. No one will be using USD to purchase goods and services if the government’s gone because the nation would be in a completely different state unlike what we’re used to seeing if the government fails like we’re talking about.

Let’s look at the Depression once again. The average person was getting services and goods through bartering and not much else. My Great Grandparents (yes and I’ve even met my Great Great Grandmother when I was really young) told me stories of how they paid for doctor visits by cooking up a turkey for the doctor and stuff like that. Money was more of an afterthought because of what was going on with the economy.

The US Dollar won’t be around once the US Government (the only thing backing it up) is gone. Just because there will be a bunch of people that really want it to still be worth anything doesn’t mean it will be.

Bee Mizser: “But believe me, for every dollar/pound/euro/etc in circulation, there is somewhere an equivalent amount of gold/silver/platinum/etc held in a reserve.”

That is completely incorrect. US Dollars, at the very least, are “fiat currency” — they are *not* backed by anything. (Google on the term for full explanation, but this Wikipedia article is informative: http://en.wikipedia.org/wiki/Fiat_currency )

The lack of backing with precious metals for the US Dollar is made perfectly clear by this statement of the United States Treasury: “Federal Reserve notes are not redeemable in gold, silver or any other commodity, and receive no backing by anything This has been the case since 1933. The notes have no value for themselves, but for what they will buy. In another sense, because they are legal tender, Federal Reserve notes are “backed” by all the goods and services in the economy.” (from http://www.treas.gov/education/faq/currency/legal-tender.shtml )

As for the United Kingdom, “[t]he British government ended the convertibility of Bank of England notes to gold in 1914 to fund military operations during World War I. By the end of the war Britain was on a series of fiat currency regulations, which monetized Postal Money Orders and Treasury Notes….In the UK the pound was returned to the gold standard in 1925, by a somewhat reluctant Winston Churchill….The British government abandoned the standard again on September 20, 1931. Sweden abandoned the gold standard in October 1931, the U.S. in 1933, and other nations were, to one degree or another, forced off the gold standard.” (Wikipedia, http://en.wikipedia.org/wiki/Gold_standard “Abandoning the standard to fund the war”)

Now, that’s not to say that *some* precious metals aren’t held in reserve by central banks to help keep a currency stable. However, very few countries do so at the 100% rate you state. (Switzerland apparently being one such country.)

Note that while most of the quotes are from Wikipedia, which some do not consider a reliable source (a point which I would contend, since studies have show it to be as reliable as published encyclopedias, like Britannica), I made a point of also quoting the United States Treasury’s website, which should certainly be considered a definitive source.

If you look at any British note it has a signed statement. “I promise to pay the bearer on demand the sum of X Pounds”. That actually refers to the value of the note being paid in gold by the Governor of the Bank of England. Now I suspect you would have to jump through hoops to get this and in reality you would get it at gold scrap value which is barely an ounce of gold per pound.

Obviously for pretty much everyone, such small amounts of gold are not practical as currency so the promisary system of money works. But believe me, for every dollar/pound/euro/etc in circulation, there is somewhere an equivalent amount of gold/silver/platinum/etc held in a reserve.

When I was writing this, I was focused more on the individual, or the microeconomic side of things. And I stand by the statement that predicting what individuals will spend on is difficult compared to real life, where SL does not have necessities, or other MMORG’s, where buying choices are more limited.

But a good point taken is that this article does not address the economy as a system, or on the macroeconcomic scale. Trends are more visible and predicatable on the macro side, as opposed to the micro side. I’ll have to go back to the library for the next economic piece, only because there are so many interesting things going on with the economy on a macro scale.

And yes, I’ll use Excel to make sure my math is correct.

No, I am completely right.

How many US citizens do you know of that actively partake in the trading of goods and services for the United States dollar? I’m sure you know at least a couple. That being said, who, of those people, would be willing to accept that all of their hard-earned cash is suddenly invalid? Probably no one. Since nobody will ever accept that fact, the US$ will continue to be used for the same purposes and by the same people until an alternative, federally sanctioned form of currency reappears. Until that time, though, even if the US is long gone, the US$ will not cease to exist.

So far we’re following in the footsteps of the Roman Empire before it fell in several ways…more imports than exports…military might being challenged by barbarians on many fronts…people refusing to go into military service…general morals of the population deteriorating (gladiator shows vs. reality TV, UFC, celebrity worship, etc.)…a corrupt system that those in charge refuse to reform because of the luxury it affords them…

Their economy came apart and their money became worthless before the Roman Empire went away. When the US Government is on it’s way out (we still have a while I believe) the money will be one of the first things to go.

But otherwise I agree that L$ and US$ can’t be compared as there is actually a US government but not an SL government.

“rather than make a meaningful real life protest against real world injustice like hmmm the Iraq invasion, or the Afganistan invasion or protest for change in something trivial like hmmm nuclear power or global warming”

Maybe I am in support of the destruction of all those damn towelheads. Maybe I don’t want nuclear waste in my drinking water. Maybe I know the truth about global warming and realize that it is all a big LIE.

@Angel (again):

“Proofread Jessica.”
…
“under my countries Baby Bonus”.

country’s*

Proofread, Angel.

@IntLibber FatAgain (LOLPUN):

“what makes you think the US Dollar is collateralized? Its not, its a fiat currency without any” blahblahstfu

I actually feel compelled to agree with Kalel… as much as it hurts me to do so…. because L$ and US$ are COMPLETELY different. United States currency may be called “Federal Reserve Note”, but note that it also says “Legal Tender”. For as long as the United States exists (it will exist for a long time, trust me), those notes will have as much worth as is printed on their face.

See, when you are using gold and silver as currency, sure it has insurance right there being in your hand, but it is not a currency. You will have no economy in such a situation. And if the government were to put a serial number on every coin… who says it can’t be counterfeited? Gold and silver coins would be the easiest things ever to counterfeit ever. So you are left with gold and silver in vaults, and representations on cotton paper… United States currency. Federally sanctioned currency is just that: Federally sanctioned. It is federally insured. It is nationally recognized. And if the US government were to somehow be removed from existence, those notes would still exist. And with all those billions of notes in existence, there is not a CHANCE of them no longer being recognized by everybody. Sure, it may no longer be legal tender, but it must still be recognized as tender, because that’s all people will have for money. It will never, ever go away.

Now, on to Linden dollars. With those, you have gold and silver in vaults (US), with representations being numbers printed on cotton paper (US currency), all of which are sent by the customer to Linden Lab, which are represented electronically as Linden Lab’s property (financial institutions), which is then converted into spacemonies (L$), which are represented with ones and zeros and then distributed among the people who buy them. If LL wanted to take the money and run, they could do so… easily…. What most people don’t seem to realize is that Second Life is a GAME; managed by a COMPANY; taking real MONEY; converting it to FAKE, UN-INSURED “money”; and then PROMISING (promises don’t hold up in court, dumbasses) to give you real money in exchange for the fake money. There are some missed steps in logic here, IntLibber. Sure, when you REALLY get down to the nitty-gritty of the US economy, you may find that we don’t have as much gold and silver as we do money, but that is a government. Linden Lab is a multi-million-dollar enterprise… the scum of the world… and if they are ever backed into a corner by the “residents” (LOL) about a big issue, they could press the “off” button and be gone with all your money… never to be seen again.

tl;dr stop comparing L$ and US$, because they are not alike in any way.