When dealing with fiat money like RM, dollars, euros, etc what is really important are intangibles. Neither the United States nor the United Kingdom have ever defaulted in any of their financial obligations. As a result their money is relatively strong because they inspire tust and confidence. In less than two hundred years, for example, France had two kingdoms, two empires, five republics and was under military occupation twice. Confidence in the French franc is low. Confidence in the euro will be low, and the money weak for two generations--until it has a proven track record which inspires confidence.
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in the French franc is low. Confidence in the euro will be low,
and the
money weak for two generations--until it has a proven track record
which
inspires confidence.
Ahh, that's one way of looking at it, and I admit that it's not
without valid points.
But shouldn't the US dollar be much weaker then?
Sure it's a strong economy and hasn't defaulted. But apparently they
didn't have enough to pay their UN fees until recently, and the
country itself hasn't even been around for very long if you compare
to their European counterparts, and even during that time there has
already been one civil war, not to mention a very recent "act of war"
towards it...
> in the French franc is low. Confidence in the euro will be low,
and the
> money weak for two generations--until it has a proven track record
which
> inspires confidence.
>
Ahh, that's one way of looking at it, and I admit that it's not
without valid points.
But shouldn't the US dollar be much weaker then?
Sure it's a strong economy and hasn't defaulted. But apparently they
didn't have enough to pay their UN fees until recently,
Oh, we _had_ enough, and more than enough; we were simply in disagreement
with the UN about what to spend it on. And the UN isn't a financial
market, so the accountants and traders and bondholders don't necessarily
look on it the same way.
and the
country itself hasn't even been around for very long if you compare
to their European counterparts, and even during that time there has
already been one civil war, not to mention a very recent "act of war"
towards it...
And we didn't default on our bond payments during either of those.
Compared to, say, France, we're really very stable.
Tony Z
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On Fri, Jan 11, 2002 at 03:04:44PM -0000, imrahil_genesis wrote:
--
"The King with half the East at heel is marched from lands of morning;
His fighters drink the rivers up, their shafts benight the air,
And he that stays will die for naught, and home there's no returning."
The Spartans on the sea-wet rock sat down and combed their hair.--A.E. Housman
