On 17/05/2023 8:37 am, Tom Worthington wrote:
On 16/5/23 13:23, David wrote:
solidly founded on the national asset-base ...
Do any national currencies have an asset base? Isn't it all fiat money
now? That is, an Australia dollar is worth whatever someone is
prepared to exchange it for. The Australian government doesn't
guarantee to give you gold, or anything else, in exchange for it.
As an armchair economist, I think "whatever someone is prepared to
exchange it for" ultimately depends on the futures market for the
various exports each nation produces. However the futures market
ultimately depends on whether foreign investors (usually big
institutions) can make a profit with minimal risk. And that depends on
all sorts of things...
For example, the demand for thermal coal has been dropping very steeply
for quite a while now as the reality of greenhouse warming dawns on the
world generally and we begin to hear phrases like "stranded asset". But
the demand for gas, also a fossil fuel, has been rising due (in part) to
Putin cutting off the supply of Russian gas to Europe, and everyone can
see where that has led in dear old Oz.
Is there a real economist in the house? Maybe they could speculate on
the economic ramifications of a quick but inexorable rise of 1 metre in
sea level along our east coast because a a large slab of ice has slid
off the Antarctic rockshelf.
_David Lochrin
_
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