All they can do is sit and watch the paper value of their holdings fall.
Little green pieces of paper have little value to foreign companies.
Yet loans that are not actively traded account for some 60% of British banks' balance sheets, for instance, according to a Bank of England paper on fair value.
An inverse relationship between the issuance of paper by the state and the hard-currency value of that paper has been recognized for centuries, and it can be observed in U.S. history.
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As the perceived value of paper currencies erodes, people increasingly want the real deal.
And in an emergency gold is more likely to hold its value than paper money.
And that crisis in the value of paper money makes physical possession of gold a no brainer.
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If gold was turned into money it would end up being money as detached from real value as paper.
In the absence of convertibility into specie, there must be a monetary rule to anchor the nominal value of paper currency.
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Why the Value of Paper Money Declines as the Quantity Rises by Bill Bonner originally appeared in the Daily Reckoning.
Money needs psychological acceptance: The population must unblinkingly accept the fact that a plastic card or flimsy paper is of great value.
Just ask anyone who has lived through a war and watched the value of paper money evaporate overnight as the cost of bread kept rising.
Since 1971, paper currencies have lost value at a breakneck speed.
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The otherwise worthless piece of paper in your wallet conveys value because of government decree.
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We have mistaken growth in the value of financial paper for real economic growth.
Paper currencies have no intrinsic value and need the appearance of worth to inspire public confidence.
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The paper tells us that the value added of sewage treatment as measured at market prices is less than the costs imposed by pollution.
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The result is to keep the federal government and the Federal Reserve from being held accountable for policies that drive down the value of the paper dollar.
But, there has not been one, not even one 10-year period of 4% growth since the Federal Reserve took over responsibility for the value of a paper dollar.
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Under the management of the Federal Reserve, the value of our paper dollar has fallen 80% in the past 40 years and fluctuates daily providing little trust in what it will be worth a year from now.
Those who doubt the continued worth of paper money as a store of value point to two things.
Calling the coin the "golden dollar" has led some folks to think it has more value than the corresponding paper.
Yet regulators and lawsuit-fearful auditors pressed banks and other financial firms to relentlessly knock down the book value of this subprime paper, even in cases where these obligations were being serviced in the payment of principal and interest.
Recently, the Chinese government published a white paper on the Internet, praising its value and contribution to society.
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In her working paper, Winning Legally: The Value of Legal Astuteness, Yale School of Management Professor Constance E.
Value players sopped up this paper in late September, early October.
In October, the government put a ceiling on the total value of bonds and commercial paper which the top five chaebol could issue, thus cutting off Daewoo's access to capital and eventually precipitating its near-bankruptcy.
This is part of a continuing trend in which central banks have increased their gold reserves as a way of hedging or protecting against the fall in value of their holdings of paper money like the dollar and the euro.
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Yes. my alma mater, where I cut my teeth on finance in the 1960s, is not blameless for its role in sticking public investors with some mighty bad paper that was doomed to lose its value before it was even issued.
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The US government then attempted to pay this last bond at a fraction of the face value and not in gold but paper.
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