kmcdowel wrote:
A concept that I didn’t fully understand, or that just didn’t make sense was 'backing up currency so politicians can't just print it off.' I know a while back that money was a slip that was actually backed up by gold. Ron Paul said currency stopped being 'backed up' 1971. I don’t know how we could change this or what good it would do. Politicians do not just print off money when they need it, nor does our government. The value of the American dollar is diminishing, but not because we are printing them off. Some speculate that it is because of our federal reserve's interest rate, and that central banks around the world are switching from USD to Euros.
Breifly as this is pretty offtopic;
A Federal Reserve Note (AKA "dollar bills") are a
debt instrument created by a
for profit, private banking corporation empowered by congress in 1913. In times past, you could take a promissary note (ie; silver or gold certificates)to a bank or the U.S. Treasury and receive the value that it promised. This was incrementally replaced with what is known as 'fiat currency' or 'legal tender'. In 1971, the U.S. government stopped the Bretton Woods agreement, severing gold's ties to world currencies.
Since this paper has no real value, the printing- or more specifically, the creation of money out of thin air makes it possible to infinitely reduce the nominal value of a $ (FRN). This is like having a checkbook and drafting checks without reguard to the amount or interest accruedand selling the debt off to any takers. Each time congress 'pays' for something out of this checkbook, our money loses value- while at the same time those who hold our debt (ie; international banks, governments like China...) take significant benefits.
