They must fluctuate in a free market. It would be economically inefficient for currencies to be locked. It benefits some countries to have a lot of money that is valued poorly while others benefit from having smaller amounts of money that is valued higher. Otherwise there would be a single exhange rate and no room for free enterprise. Rising and falling exhange rates make for opportunities in global trade which helps drive free market economies. The US dollar has been the de facto global currency for many decades because of the stability of the US government and economy. This security has value above and beyond a dollars worth of gold. Conversely, the currency of the King of Tonga has less value than its worth in gold. Governments in the West, for the most part, don't set the values of currency, this is done in the private sector. It's always going to take a lot of Tongaroo's to buy a dollar and that number fluctuates.
I'm not going to deny this is beyond my level of economic understanding, but I don't understand why the value of currencies should be variable relative to what they are supposedly based on. It seems the value of goods should fluctuate from country to country, not the value relative to gold (if gold is the standard). Tinkering with the value of money seems like a devious exercise. For example, I can understand how a dollar could buy a pound of bananas in the US, but buy 5 pounds of bananas in a banana producing country. The fluctuation of money relative to gold seems like it would be related to poor economic decisions by some countries relative to the economic decisions of other countries. As such, basing one's currency on the economic decisions of other countries doesn't seem wise (though it may be profitable in the short term).
Are you just quoting material from Ron Paul's press kit or coming up with these ideas that currency values should remain static, regardless of the host country's economic situation, yourself? I have some Confederacy States of America bundles you can buy from me at face value if your interested.
Hmm, I guess that kind of makes sense. The closer a government is to failure the less valuable their currency because they don't have the gold to back the currency... But then again, if a government doesn't have the gold to back the currency, the result is inflation. So the only way to have inflation is to sell the gold from under the currency or to print too much money. That doesn't sound like wise economics. But, like I said, I'm not an economist. And I apologize to Ron Paul, his arguments are much more sophisticated than anything I can come up with. I appreciate you more economically taking time to respond to my questions, seriously. I'd appreciate it if you checked the video link the other guy posted and tell us what's wrong with what Paul is saying. It sounds like Bernanke is trying to blame the congress. Economists applauded Paul's message when he confronted Bernanke.
The naysayers are giving lip service. The value of the dollar is in the toilet right now and will continue to do so without some sort of change. The economy is great right now, but the dollar is weak. Yah that sounds like something we want.. ugh
Ron Paul is over 10 million today and is hoping to get to 12 million ASAP. If you can afford it, donate today. The media is watching today carefully because it is a new stated goal to raise 12 million before December so that the money can be spent in the early primaries. I'll be donating today.
December 16th (Sunday) is Tea Party 2007. Donate $100 to Ron Paul's cause. If you aren't a Ron Paul supporter, at least keep your eyes open. Paul is at 11.425 million and should easily reach his 4th quarter goal of 12 million. How far will it be surpassed? Watch and see. :thumb:
