Name: Commodity money vs. Fiat money
Uploaded: 2016-11-04T00:41:30.000Z
Duration: 8 min 18 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

ya know food that you can eat, or things that you

But what is it about this little piece of paper

Or I guess it's not paper, as it's cotton,

But the questions stands, right, like what

makes this flimsy little thing, that doesn't

seem to have any use in it's own right, valuable?

Well, one kind of interesting exercise is

and take a look at what the very, very first

So I have here one of the very first that was printed,

So if we zoom in, let's just say towards the very top here.

Well, if we zoom out a little bit, it says,

it says that this certifies that there has been

deposited in the treasury of the United States of America

in an awkward way below, one silver dollar payable

So what that means, what this dollar originally represented

was the fact that you were gonna be able to

This piece of paper in theory, could be turned in

to the United States treasury, which guaranteed

that it had in its deposits a silver dollar,

an actual piece of silver, and I'll show what

one of those looked like in just a moment,

So in a sense what gave it value was this guarantee

that you could turn it into silver if you wanted.

So this way you could trade this with other people

as if it were a piece of silver, 'cause if you gave

it to someone that person, now being the bearer on demand,

And the reason for even having this paper money,

and printing these bills is that it was pretty

inconvenient to always lug around actual pieces of silver,

And this would be especially true in the case

So for example, here we have a 10,000 dollar bill.

Something you don't really see too often.

And if we zoom in and kind of see the guarantees

that are written on this guy, it's actually very similar,

but its this is instead in gold instead of silver.

It says that $10,000 in gold are payable to the bearer

So kind of legally backing up the idea that this could be

So that way people could actually treat this as if it was,

ya know $10,000 worth of gold, without having

So what is it that you actually got when you turned in,

ya know for one silver dollar or something like that.

Well you have, what's another form of money,

what you can use in commerce and kind of trade

Officially United States money, but the difference is

that the piece of money itself, is the valuable metal.

It actually is the silver, so in theory if you ya know,

didn't trust the United States Government anymore,

you could melt it down for just the pure silver

and maybe other countries still value that silver.

And similarly there was gold coins like this

So, this is something where the value is held

within it because presumably people value gold,

and even if this didn't have a fancy you know,

United States symbol all stamped onto it,

it would be something valuable, because it's gold.

And this kind of money, this ya know gold coins

or these silver coins has a special kind of name.

And basically what this means is that the thing

that you're using for money, the thing that you're

trading around, has some value in it's own right.

This word here, commodity, basically means just

anything valuable, it could not only be ya know

silver or gold, but things like food or furniture

And you know you could argue that silver and gold