fort knox

Kriton Kyrimis kyrimis at cti.gr
Mon Jul 29 08:21:32 CEST 2002


CORD:

> The whole thing gets even more complicated since we started using
> money which has no (controllable) physical representation at all:
> Just little numbers on paper or in a computer. What is their worth?

Actually, when we started using paper money, they were more like
checks. Apart from those little numbers that you mention, there was
usually a phrase saying something like "pay to the bearer the sum of
XXX". In old times, you could actually take your paper money to the
bank and exchange them for gold coins of the same value. [I recently
read that this is exactly what people used to do in Greece in times of
economic crisis, which is why the government would temporarily suspend
the exchange of paper money, so that they would not lose their entire
gold stock. Given the frequency of economic crisis in Greece, this was
almost a permanent situation. :( ]

The drachmas that I used to have in my wallet until last year still
said that XXX drachmas were "payable upon display" of each note, even
though I doubt that there was such a thing as golden drachmas other than
a few coins especially minted for collectors. However, the euro notes
that replaced them do not have a similar phrase, which means, I suppose,
that I have to take the European Central Bank's word on what these notes
are worth.

> But in the
> end it all boils down to trust. But trust in whom? In the seller?
> the bank? the government? the future?

In the government. Trust them to make life for you extremely difficult
if you do not accept their money...

And if you think what you've described is complicated, try taking
international exchange rates into account. These last few months, the
dollar has lost something like 10% of its value compared to the euro,
but I doubt that prices in the US have risen significantly during that
period, and I know that they did not drop by an equivalent amount in
Europe. It is actually European prices that have gone up!

	Kriton	(e-mail: kyrimis at cti.gr)
	      	(WWW:    http://dias.cti.gr/~kyrimis)
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"I'm *depending* on luck, lieutenant; It's almost the only tool we have that
 will work now!"
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