Its simpler than you might think

Imagine you have a country that is really good at making Cars, they make and sell a lot of them to a second country. The second country can only grow food, and it's really easy to do it, so much so that there's far more excess food in the world than cars.

Now, in order for those two countries to trade fairly, they have to essentially only trade equal value (whatever everyone feels the fair price of each is) of each of their "stuff"

But in practice, this never happens, right? I mean, you can't have the U.S. saying, "No, we've imported enough German cars this year, we can't import any more or else you Germans will be giving us more value in cars than we gave you in food."

Because then you'd have shortages of imported goods, artificially made by laws.

So instead, national currencies are supposed to make up for this difference in value traded.

In some "ideal system" national currencies would always float relative to each other such that if we imported too many German cars one year, instead of simply stopping all imports of cars from Germany, the value of our currency would go down just a little bit when compared to Germany's currency. The imbalance in currency value ideally should reflect trade imbalances.

However... that doesn't happen either, and really can't as long as humans are in charge of currencies.

Because you'll always have some country where one person has total power, and he/she will want to take advantage by artificially manipulating their currency (by simply printing more) and in so doing control it's value such that you can make it cheaper to manufacture goods in your nation in some kind of "permanent" way.

This is essentially what China did, they pegged their currency against the dollar instead of letting it float, and they performed whatever currency purchases on the open markets as they needed to keep it there. They still do this to this day.

In this way, Chinese goods were always made cheaper than if they were manufactured in the U.S., they've done this for decades.

They're definitely not the only country doing this, which is why the U.S. has a problem, much like Starbucks. Japan (our friends) have been allowed to do this for a long time (not so much pegging their currency, but certainly manipulating it).

There's other things that complicate this, like military spending.

I'm super behind but the up tick in outsourcing happen way back in the 90s

Late 80s

Actually earlier than that. Automobile manufacturing started to go to the Japanese in the 70s

Thanks for explaining that, I never did understand currency myself

@Jeremy-Retard I forgot about that

I'd like to read up on economics for the sake of improving my debate. Maybe take a 101 course at home

I assume an economics textnook would cover currencies?

should do yeah

Its definitely interesting something I might look into morw

More

Crypto definitely showed us all how little the general public knows about currency

Yeah. I can honestly say that I knew absolutely nothing about currencies until I first read the bitcoin whitepaper... and then I asked the question... "wtf is currency"... and I couldn't stop learning on that topic

It was a f-ing addiction... learning crypto is like picking up the best thriller novel you've ever read, you won't stop reading until you recognize crypto as a bigger human advance than the internet.

Crypto still hugely weirds me out, mostly becasue the spikes and drops are necessasrily speculative rather than driven by production

so like fiat currency but without someone pretending they know what they're doing

Understandable, but you have to consider the source of the valuation you're comparing them to.

If you're valuing crypto against fiat, the valuation is always going to be shoddy or manipulated.

And that's on top of speculation by people with throw-away money.

well my point of comparison is the valuation of actual goods, which can be speculatively shifted but that speculation is based off of actual things that have really happened, or will potentially really happen

whereas Crypto just seems to be layers of people speculating on other people's speculations and pretty much nothing else

it's fiat if fiat never evolved from a standard whereby production determined economic value

I don't think it's fair yet to compare crypto against goods, because there are no vendors who are directly valuing their goods in crypto, it's always Crypto->fiat->goods.

If/when forms of energy are valued in crypto, then the world will change.

you can value goods in anything, but there's no solid basis between the two necessarily

I mean, isnt that basically the only basis behind crypto valuation currently in a way? The processing power required to generate BTC and other currencies?

it's indirect, sure, but it's there

It takes energy to make crypto, but no one is buying basic energy resources (oil/gas/nuclear/etc..) with crypto. No one sells oil for crypto.

sure