USA Gold reserves

[akarunway 1]

So. What backs American debt/currency. A small amount of gold? Trust? Our military? I'm so confused. http://en.wikipedia.org/wiki/Official_gold_reserves "The United States' holding of gold is worth approximately $241 billion (July 2008). Although the United States has the largest reserves of individual countries, in total the eurozone gold holdings are greater (11,065 tonnes as of December 2007)."

I hold it true, whate'er befall;
I feel it, when I sorrow most;
'Tis better to have loved and lost
Than never to have loved at all.

[quade 3]

Essentially?

http://www.youtube.com/watch?v=MJJN9qwhkkE&NR=1

quade -
The World's Most Boring Skydiver

[billvon 2,435]

>What backs American debt/currency.

Used to be paper (debt instruments, etc.) Now it's just bits in a computer.

[akarunway 1]

Quote

>What backs American debt/currency.

Used to be paper (debt instruments, etc.) Now it's just bits in a computer.

Pretty much what I was getting at.

I hold it true, whate'er befall;
I feel it, when I sorrow most;
'Tis better to have loved and lost
Than never to have loved at all.

[quade 3]

Quote

Quote

>What backs American debt/currency.

Used to be paper (debt instruments, etc.) Now it's just bits in a computer.

Pretty much what I was getting at.

But how is that fundamentally different than bars of gold? The value of anything is just what somebody else is willing to exchange for it. Gold isn't anything "special" if you really think about it. Why not diamonds or rubies or giant stone wheels?

Ultimately the "money" is in the investments made to "things"; buildings, homes, hospitals, businesses.

quade -
The World's Most Boring Skydiver

[alw 0]

The productivity of the American Economy is the basic answer. Here's a good place to start.

http://economics.about.com/cs/studentresources/f/money.htm

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Every day is a bonus - every night is an adventure.

[billvon 2,435]

>But how is that fundamentally different than bars of gold?

They cannot easily be duplicated. They cannot be accidentally erased. They are difficult to move, and easy to guard.

>Why not diamonds or rubies or giant stone wheels?

Diamonds or rubies might work. Giant stone wheels are too easy to duplicate.

[jraf 0]

The world has abandoned the Gold Parity system in 1974. It is a pretty outdated idea.

The value of a national currency is rated by the confidence that is put in a nations economy. That is in the free market of course.

jraf

Me Jungleman! Me have large Babalui.
Muff #3275

[billvon 2,435]

>The world has abandoned the Gold Parity system in 1974. It is a pretty outdated idea.

It certainly has its pluses and minuses. Three years ago we saw some of its pluses in the real estate bubble. We are now seeing some of its minuses.