Quote:
Originally Posted by Ferra
our currency is backed by the government...(in the past we had the gold standard so you can go to the government and exchange it for gold...that basically gives it a guarantee intrinsic value.)
obviously we don't have the gold standard anymore...but our economy and government is a lot more stable and established now...the currency is still guarantee by the government in the sense that the government stipulates its currency is a legal tender within its border...and they can enforce it with their rules and power.
basically, the government's power and worthiness give the currency its intrinsic value
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That's great but you might not necessarily want to keep all your money in there. For us it's fine, Canada is pretty rich and pretty stable. But ask anyone in a country using the Euro how much 'intrinsic value' their currency has that is 'backed by the government'.