No…no we are not.
If you want cheap junk yes…but overall we are not.
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When gold was money,
People did not actually carry aroudn physical gold.
The central bank sequestered gold and issuedpaper ownership cerifcates for that gold
When tobacco was money, (old Virginia)
the gov’t sequesterd tobbacco and issued paper ownership certificates for that
The same could happen (hypothertically) if nails were money, dried fish were money, oil was money or cigarettes were money.
What does the central bank sequester today?
Right, we shuffled it around under the NY Fed. Today, the central bank doesn’t sequester anything physical. That’s is the beauty of a sovereign fiat currency in a powerful economy.
Money is IOUs.
What doesthe Fed sequester?
(it is not a rhetorical question).
When money was gold (which it was not under Bretton Woods btw) they sequestered gold and issued paper ownership certificates for __ gold. __
When money was tobacco, they sequestered tobaccoand issued ownership certificates for __ tobacco. __
What thing does the Fed sequester today?
Our dollars, today they ownership certificates for _______.
(C’mon. You can do it.)
Fiat currency is not an IOU.
It is not backed by a commodity.
Under Bretton Woods foreign currencies were dollar-convertible and dollars were gold-convertible; at least to the degree that any currency is legitimately convertible. Because we were the most powerful economy in the world - our strength - other nations believed the convertibility claims (even if they were false).
Today the Fed does not sequester anything. The value of our currency is that (1) it is issued by the strongest economy in the world so people in every corner of that world attempt to hold it. In FACT, they want to hold so much of it that we can trade them these slips of paper for actual, produced product. And (2) the Federal government requires payment of taxes in that currency (At least up until now. That does appear to be changing as the tech-bros convince the administration to create a blockchain system).
The Fed spends money into existence with no corresponding liability. The Treasury department taxes that money out of existence.
When money was gold the Cent banks sequestered -->gold<–
and issued paper ownership certificates for -->gold.<–
(You know that, right?)
What -->thing,<-- does the Fed sequester today?
Today, our dollars are not ownership certificates for -->gold.<–
Today our dollars for -->_______<–
(Fill in the blank. C’mon. You can do it.)
nothing.
The faith and credit of the US government. No commodity backing.
Incorrect on both counts.
In the 1700s
The colony of Virginia bought -->tobacco<-- and stored it.
It issued ownership cerficates for the -->tobacco<–
Every unit of currency issued was an ownership certificate for -->tobacco<–
(See Illus 1 below)
Prior to 1933,
The Fed bought -->gold<-- and stored it.
It issued ownership cerficates for the -->gold<–
Every dollar issued was an ownership certificate for -->gold.<–
(Illus 2 below)
Today
The FOMC buys -->IOUs<-- (bonds) and stores them.
It issues ownership cerficates for those -->IOUs<–
Every dollar issued is an ownership certificate for an -->IOU.<–
.
.
.
.
.
Illus 1
Tobacco note (1,000 lbs), Virginia
Illus 2
US dollars are not backed by any commodity.
They are not backed by stored bonds. Bonds raise dollars. You can’t back a dollar with a dollar.
Do you know are dollars issued?
(Obviously it’s not literally by helicopter and obviously it is not by literally giving them away to rich coroprations.)
Do you know how it literally really happens?
US dollars are not backed by any commodity. I’m not sure why you are arguing that.
Yikes.
Even when confronted with the facts you hold to your narrative.
Incredible.
They really did a wash job on you.
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What commodity is the US dollar backed by?
It is backed by IOUs.
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What are the IOUs payable in?
currency same as when gold was money same as when tobacco was money.
In each chase the central authority
sequesters some -->thing<-- and issues ownership certificates for it
and guarantees redemption upon request.
Whether the -->thing,-- is
gold (zero interest) or
tobacco (zero interest) or
IOUs (whihc pay interest), does not mean
not “dollars are backed by nothing.”
once again I ask
Do you know are dollars issued?
Do you know how it literally really happens?
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Currency can’t be backed by itself.
It;s not it is backed by IOUs (bonds)
Tobacco backed
“If you bring me tobacco I’ll give paper. If you bring me paper I’ll give you tobacco. No guaratee those papers are good for anything but tobacco at my counters.”
Gold backed
“If you bring me gold I’ll give paper. If you bring me paper I’ll give you gold No guaratee those papers are good for anything but gold at my counters.”
IOU backed
“If you bring me 4% IOUs I’ll give paper. If you bring me paper I’ll give you 4% IOUs. No guaratee those papers are good for anything but 4% IOUs at my counters.”
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US Bonds (Treasuries) are currency in the world market. It’s the currency used, for example, to settle international balance payments. So by this logic, the “IOU” is backed by an “IOU” which is also the thing it backs.
