To me it’d seem that the only reason paper money is worth something is because enough people believe it is. And if that’s the case and more can be printed. There’s no rarity really either. I’d love to hear some explanations. Thanks.
In: Economics
Money in the US holds value because it is the only currency the US accepts to pay taxes. There will always be someone who needs to pay taxes, so the dollar will always hold value.
Lets take something you don’t value like sand. Your land lord says starting next month he will only take rent in the form of bags of sand. Now you have a reason to value sand. You’ll need to exchange goods or services for sand if you want to avoid getting evicted.
Even the people who aren’t tenants of your sand loving landlord will value sand more now. They know tenants will be willing to exchange goods and services for it. So they’ll be more incline to accept sand as a form of payment.
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