The US debt has become the defacto world currency.
US$ is more stable because it is a debt. A debt is a concrete concept. It is backed by the education, productivity and creativity of the population.
When it is simply plain money without the debt, the US$ would have no actual value. How can you place a "real" value on a currency that has no backing?
The world trades in US debt because they believe in the creativity, productivity of the US. They want the US$ to be backed by the industrial activity and creativity of USA. The only way to tightly bind them to the US$ is thro debt. Without debt tied to the US$ there is no obligation or motivation for the US$ to accrue value.
The fundamentals of the US economy is our creativity and productivity. Would China trust the debt of Pakistan, which has half the population of the US? Why not?
The US does have a lot of natural resources. We have more oil reserves than any country in the world. We have rare metals the environmentalists would not let us mine, unlike China. Yet most countries in the world that have lots of natural resources continue to be poor. Without the continuous improvement in industry and technology of our population, our resources would be like those of countries - to be exploited by corporations without spilling the prosperity into the local economy.
Why do we refuse to invest in our education. Why is our education system insufficiently funded or equipped to produce the scientists, mathematicians, engineers, economists that we need? Why are our students enticed toward gaining worthless and unemployable and non-technical degrees? Like art history or phys ed.
How much more should we depend on H1-B as a way to bolster the fundamental value of our economy?
Gold is a silly derivative. Its value too is an economic bubble. Gold is a worthless way to back the US$. The value of gold is induced by the industrial activity and creativity of a nation. Without industry, the value of gold would collapse. Or the value of gold and economy would flee to another country that do have industry and creativity.
Using gold as currency or backing our currency is like having a hospital backed by 200 beds. Regardless of how the community's population has increased, the owners still wish to have only 200 beds. It is like having only two runways in an airport where the authorities refuse to expand the number of runways even though the number of air travellers have exploded.
Therefore, using gold as currency or backing, would place severe restriction on an economy to expand and contract in a flexible manner. Money is a kanban. The Bible mandates that the value of this kanban be reset once every 50 years. However, people who purport to be Bible-observant does not want money to be a kanban that is to be reset once every 50 years.
Even the book of Revelation assigns worthlessness to the value of gold, but gold-loving materialistic neo-fundamentalist Christians somehow like to violate their scriptures whenever they see fit, while claiming to be Bible-compliant. They talk about knowledge and wisdom from the books of Proverbs and Ecclesiastes - but it's all empty talk because they believe gold ownership is much more fundamental than the education funding of this country.
Perhaps, the neo-fundamentalist movement also coincides with the silently supremacist neo-conservatives who have a silent tacit understanding among themselves to ensure those whose ancestors had been enslaved in this country for a couple hundred years continue to be enslaved in poverty. Because they realise that the only effective alleviation to poverty is education.
The only effective solution to poverty is education. Not wealth redistribution.
