I’m confused
It used to be that paper currency was backed by gold and silver for its value. A 10$ paper note would be redeemable for 10$ worth of gold or silver following the gold or silver standard. Currently our bills are fiat money which means they are not backed by any tangible item. They’re just based on the strength of the economy. The economy can fluctuate so it makes the actual value of a bill unstable. These Mcdonalds coins, however, would be a currency that are redeemable for a Big Mac. This would make them a technically more stable currency as they are always have the value of a Big Mac they can be redeemed for.
Keep in mind that the instability of our currency is a *feature*, not a bug–when the dollar gets weak, it makes domestic products cheaper for foreign buyers, which naturally encourages investment in our products by foreign trade partners. Essentially, the instability of our currency makes our recessions less bad, and less long-lasting, than they would be if we were backed by gold or if we couldn’t print our own money to pay our debts.
That’s why, for example, Greece is in as bad a situation as it is–they don’t control their own currency (the Euro), which means their currency essentially has a fixed value. It’s not truly fixed, but it is related to the economy of Europe as a whole rather than to Greece in particular, which means the only way it encourages foreign investment is if all of Europe suffers a recession–which it is terribly unlikely to do outside of a worldwide recession that would prevent it from benefiting–plus what influx they do get from a weak Euro is not to the benefit of a single economy, but distributed amongst multiple separate economies.
This is one of the big weaknesses of the EU as a political entity–while it has a lot of benefits in terms of encouraging trade and immigration amongst its member states, economically speaking it doesn’t go far enough to unify the European economy and therefore actually *weakens* its member states that don’t retain their own currency. And despite this, leaving the EU after already having become a member hurts the economy *even more* than joining it in the first place did (see for example how badly Britain is being affected by the clusterfuck that is Brexit).
Thus, Greece was in between Scylla and Charybdis when their economic blunders hit home. They couldn’t print their own money to pay their debts, and they also weren’t enjoying the benefits of a truly unified European economy–they were forced to take loans from other Euro-states like Germany who imposed austerity measures as terms of their loans that were *even worse* for their economy. It might be generations before Greece is again a healthy economic entity, and while in large part this was due to mismanagement of their government’s spending practices, the reason it’s going to be as long-lasting an effect as it is was because their currency was too stable for them to easily bounce back.
tl;dr: Instability in currency might make the economic highs less high, but it also makes the economic lows a lot less low. The net effect is beneficial.
And yes, I’m well aware I’ve put far too much effort into a reply to a silly thread about the economic ramifications of hamburger coins. I’m just passionate about the importance of fiat currency and deflating the “common sense” belief a lot of people have that a currency that has a stable value is superior.
QueerGalaxies 