At the currency, yes that is true. With the USD, to me, it isnt even a currency anymore. It is a unit of account. That is how big it is.
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At the currency, yes that is true. With the USD, to me, it isnt even a currency anymore. It is a unit of account. That is how big it is.
Yes, 99% of it's exactly that and that is a good thing. Imagine moving Trillions of cash or gold balances around?! Get wracked... no way.
Funny when people talk about bank runs, it is like they are in Its a wonderful life in the 1930s. What do you mean cash backing the deposits? The deposits were done using cash. Do people think cos are putting up cash to pay the salaries?
Of course not. There was no cash backing the deposits to begin with. That is why settlement is so important and the monetary system is the focus, not money. That is secondary and changes over time.
It's laughable, like in a mafia movie. Massive Cash in sports bags or wheelbarrows. That's the stuff that drove 90s Gangster movies, but not a modern global economy.
The monetary system is based upon speed and settlement. That is what makes the romanticizing the past inane. Are people willing to wait weeks to get money as physical assets are moved around the world?
I do most of my transactions live. I make a call or fly somewhere and expect that real-time transfers of any amount below 6 figures can get done instantly. It's really important.
If I'd be a furniture producer in Indonesia and some company from Norway would like to buy a container of my chairs - I'd want to get USD in my bank account. Pay the ship in USD, pay the customs in USD, pay my suppliers in USD, and convert my gains into the local currency. It's a no-brainer.
And I would not want any cash involved in that process at all.