| ▲ | tbrownaw 4 hours ago | |
> All prices are made-up. Nope. Most prices are in large part dictated by market forces. Including the price of money. | ||
| ▲ | zahlman 3 hours ago | parent [-] | |
> in large part dictated by market forces. Yes. As long as currency exists, that's making it up. Because there's no intrinsic reason for the notes to be worth what they are. Which is to say, market forces can drive a ratio like, say, (GDP / M2) according to current level of trust in government or the level of economic activity etc., but when we measure the numerator and denominator in "US dollars"[0], there's no intrinsic reason for that unit to be the size that it is. A simpler way to see this is to note that we could just as easily measure both in "US cents". Or in "Lincolns" (a unit equal to 5 USD)[0]. Or whatever, as long as we're consistent. We just don't. [0] I'm Canadian actually; this is an attempt to make the post more relatable to a larger number of HN readers. | ||