Gisele Bundchen (currently the world’s highest paid supermodel) refuses payment in US dollar

November 6th, 2007

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In What should be your fundamental reason for accumulating gold?, we mentioned that:

As we said before, money is fiat if it enjoys legal tender status through the authority of the government instead of through the choice of the free market. This means that fiat money is not backed by anything physically tangible?it derives its value from an elusive intangible called ?confidence.? Simply put, fiat money is backed by nothing!

Today, all currencies (including the US dollar) in the world are fiat. Today, we found this report in Bloomberg:

Gisele Bundchen wants to remain the world’s richest model and is insisting that she be paid in almost any currency but the U.S. dollar.

A fiat currency becomes worthless the moment its elusive intangible quality called ?confidence? is lost. As far as Gisele Bundchen is concerned, she has lost confidence in the US dollar.

This we agree with her. But we see that she has negated this wise decision with a foolish decision?she insisted in being paid in Euros. As we said before in How does the US export inflation?,

That is why when the US opens up their spigot of US dollars and engages in a global spending spree, foreign countries have to follow suit by inflating their own money supply so that their currencies will not be overly expensive relative to the US dollar. The result is worldwide synchronised price inflation and asset bubbles.

The reason for not trusting in the US dollar is also the same reason for not trusting in Euros, Yuan or Australian dollar (see Degradation of Australia?s fiat paper money).

If we were Gisele Bundchen, we would insist on being paid in gold.