What Really Backs the U.S. Dollar?
Since , U.S. citizens have been able to utilize Federal Reserve Notes as the only form of money that for the first time had no currency with any gold or silver backing. This is where you get the saying that U.S. dollars are backed by the “full faith and credit” of the U.S. Government. Decades ago the U.S. dollar was backed by gold -- a mineral that is valuable because people believe it is valuable. The same is true of the U.S. dollar, whether it is backed by gold or not. People accept dollars in payment because they believe the dollars have value and and can be spent elsewhere. What backs up the dollar is the public's faith that the government will not print too many and the confidence that the .
Among those whom I like or admire, I can find no common denominator, but among those whom I love, I can: all of them make me laugh. AudenAnglo-American Poet. Many a naysayer, many of which fall under the newsletter writers camp keep pumping the nonsense that all paper money will cease to exist and that everyone will revert to the gold and silver standard in the not too distant future. First of all, they are about years too late and second of all, they are in sore need of a mental check-up.
They forget to take mass psychology into consideration and one must understand that the biggest driving force anywhere is mass behaviour also known as Mass psychology. The Gold standard did not prevent theft and outright robbery; banker was still known for shaving gold coins and other shenanigans. So many gold bugs will ask the following question: What is the US dollar backed by? In dol,ar words its as good as rubbish and while what is the dollar backed by might be true, it does not matter for the masses think otherwise.
In summary the answer si the question: What is the US dollar backed by; the answer would have to be nothing but your faith in it. Nobody in hell including yours truly wants to eollar around with a heavy sack te gold or silver coins strapped to their necks.
It just not convenient anymore and since we live in an instant demand and instant gratification society this line of thought will remain a dream. The way to end the problem is to put the following rules into play. We have inflation and fake boom and bust cycles because bankers control the money supply. Cut their what is the dollar backed by and the dirty game comes to an end. Its total liabilities have grown from some billion to some billion. How can they ever expect to pay these liabilities down when they gross profits in were 22 billion dollars.
At some point in time something is going to have to give; expect the workers who are depending on their pension and medical benefits to get a huge surprise in the not to distant future.
The other U. S auto manufacturers are in just as much trouble. We stated a long time ago that the only way they could ever compete with the Asians was to completely close tne and move overseas or the other possibility was to hire non-union workers. However, their pension and medical insurance liabilities are so large now dollaf they need to get the cheapest labour possible and one that does not require too many benefits.
Such a scenario is only available in Asia. The article below explains in a clear and concise manner how the US government has helped the Unions bankrupt a once-powerful Icon of the US economy. Fiat money is government-issued currency that is not backed by a physical commodity, such as gold or silver, but rather by the government that issued it.
The value of fiat money is derived from the relationship between supply and demand and the stability of the issuing government, rather than the worth of a commodity backing it as is the case for commodity money.
Most modern paper currencies are fiat currencies, including the U. In earlyin order to fight severe deflation, Congress and President Roosevelt implemented a series of Acts of Congress and Executive Orders which suspended the gold standard except for foreign exchange, revoked gold as universal legal tender for debts, and banned private ownership of significant amounts of gold coin.
Roosevelt attempted first to restabilize falling prices with the Agricultural Adjustment Act; however, this did not prove popular, so instead the next politically popular option was to devalue the dollar on foreign exchange markets.
This change backwd to more conversion of gold into dollars, allowing the U. The suspension of the gold standard was considered temporary by many in markets and in the government at the time, but restoring the standard was considered a low priority to dealing with other issues.
Although it has been 88 years since the system changed as much as 29 percent of the United States US is still unaware, what is US dollar backed by? One never needs their what are two benefits of collaboration and video- on- demand applications as much a when they argue with a fool.
Oct What is the US dollar backed by: Hot air and faith. Blog What is the US dollar backed by. Spread the love. What are the different types of bar graphs Investor Article Database Search.
A look at money.
The American currency, the U.S. dollar, is backed by the largely legally codified commitment of the central bank, “the Federal Reserve”, to sustain a predictable reasonable value of the currency. The central bank has some ideas what the right value should be. It sometimes does something to minimize the unemployment rate. The US dollar is backed by Nothing and hence the name Fiat. Fiat money is government-issued currency that is not backed by a physical commodity, such as gold or silver, but rather by the government that issued it. The value of fiat money is derived from the relationship between supply and demand and the stability of the issuing government, rather than the worth of a commodity backing it as is the case for . Aug 04, · The U.S. dollar is a "fiat" currency, and it is therefore not backed by any tangible commodity, but rather the "full faith and credit of the United States," as is printed on every Federal Reserve note. According to the Federal Reserve, paper currency has not been redeemable for gold or silver since January 30,
This post was contributed by a community member. The views expressed here are the author's own. Let me get this straight. Money has always baffled me. Our currency is called fiat money. Fiat money is regulated by the government through the Federal Reserve.
Fiat money has nothing to back it but debt. Our money used to be backed by gold and silver. That changed with Nixon aka the Nixon Shock, back in This enabled the fed to print money, and lend it with interest to smaller banks. Thus stimulating "growth," and making money for the Federal Reserve remember, the Federal Reserve is a private, for profit bank, and is NOT part of our government.
They just controll our money in secracy. But wait a minute? How do you print money you do not have, and then lend it with interest and make money from nothing? How does that make an economy grow?
It doesn't! It's a house of cards, ready to collapse on itself. This craziness has lead to the worst recession in our history. It is worse than the media reports. The real unemployment rate is closer to 22 percent. Our homes have lost value, our towns are bankrupt, and more and more people are joing the unemployed. Our grandparents did not buy things with credit cards they way we do today.
Money was still backed by something real, gold! People were more conservative, and lived within their means. Today, it's buy now pay later, that is bad! Credit consumer debt is money in the bank. We must change this system for the sake of our children.
Sources: Fiat Money. Nixon Shock. Federal Reserve. Islandic Bankers. The views expressed in this post are the author's own. Want to post on Patch? Register for a user account. Dollar Really Backed By? A look at money.
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