Ask most people what gives money its value and they will most likely say that it is gold. There's still a popular belief that if you take a £20 note into the Bank of England that they have to swap it with gold from the vaults, if you ask very nicely.
But that's not true. There's been no link between the pound and gold for 50 years now. All that has given money its value since 1971 is the promise that the government makes that it is literally worth the value that it gives it, which it honours by accepting that money in payment of tax. That's a big thing for most people to get their heads around.
This is the first of a series of four videos that looks at how that works - and why.
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What gives money its value (it’s potential) is when you see what happens when it is absent.
For too long society has not had enough of it and there are marvelous things waiting to be done all around us.
I’m not posting this to disagree of undermine your video.
It’s just the way I feel about the matter that’s all.
[…] a previous video I have explained that for fifty years all that has given money its value is the government’s […]
This is slightly off topic but I remember you saying that the debt was the difference between what the Gov. has spent out and what it has collected back in taxes. As I understood it you also said that if we paid off the debt 100% we would have no money. Is that true? What about all the money created by banks, I understand that is actually the majority of the money in circulation. So if we paid off the debt there would be no Gov. money in circulation but there would still be bank money? Or is bank money, created under license by the Gov. included in Gov. debt? (I’m asking because I stated the no debt/no money in replying to comments in a newspaper that got a lot of derisive replies that made me question what I said!!)
Without government created money – he central banks reserve accounts – the mechanism used fir banks to pay each other and that would pretty much end bank created money
It also justifies what I said