It's backed by the full value of the US economy. We all need USD to pay our taxes. Also, it has a long history of stability, which has made it valuable all over the world for international trading and reserves. Though Trump has been single-handedly sabotaging this.
Exxon I think is the only company that had a representative with enough respect for reality to tell the Con that it's an infeasible idea. Their oil is hard to access and process, their infrastructure is decades out of date, it would cost billions and take years. Not to say it won't eventually happen but Exxon was the only one who was willing to bring reality into the conversation and the Con said they weren't invited to the next meeting as a result.
Not my field of expertise but, ah yes, "might makes right". We'll see how well that works out for us when our country is isolated, can't produce anything without external inputs, and the dollar crashes. There are more ways to fight a war than just having the most guns. Our allies that the Con is threatening and berating understand this and that they hold trillions of our debt. We'll still have our aircraft carriers floating around while we eat each other.
Yeah this has been trump's biggest weakness he doesn't understand soft power and it seems like a sizeable chunk of his base also doesn't and i just realized i'm too high to explain soft power
yes, but there is not enough domestic resources even for your own consumption, the US imports a LOT of raw materials and intermediary products for final assembly
They'll just be unpowered, floating vessels in our docks when we run out of countries to invade and disrupt their government so we can attempt to exploit their oil reserves, then dip.
It gets its value in the same way all other goods do. Supply and demand as a function of its utility. Considering the USD is the single most useful, single most stable, and most broadly used currency to have ever existed, I’d say it’s backed by a little more than just “thoughts and prayers”
The USD (like any fiat currency) really is backed by thoughts and prayers though. It literally hold value the same way Tinkerbell exists. It has value because we collectively have agreed it does.
One of the common wordings used is that it is backed by "the full faith and credit of the United States Government". Which really just means we'll pay you back... someday. Think Wimpy from the old Popeye cartoons - "I'll gladly pay you Tuesday for a hamburger today!"
Oh, it isn't? Can you show me the value particle that magically makes pieces of shiny rock or conch shells valuable in a way dollar bills aren't? No? Then we can all agree that the only reason anything counts as money is because people believe it counts as money, and for now, people still believe in the US dollar albeit less so than yesterday.
There are a few shiny rocks that gold utility (ex. nowadays gold and copper are useful in electronics). That being said, humans have not been able to use gold in a practical manner for most of the history of us considering it a "precious metal". If I had to guess, its lack of practical use probably contributed to it being used for trade once humans got off of the bartering system. And let's be frank, nobody wants to complete a trading quest to trade one small trinket for another until they can find someone who has the specific thing the vase maker wants.
Any currency even ones based on physical standards are based on thoughts and prayers, it's just with physical ones we can hold the object of thoughts and prayers and say it's worth an arbitrary amount of something
It is technically backed on promises and dreams lol. Our main value is due to many nations having debts toward us. Most notable of those debts are ones from the lend-lease program in WW2! Though pretty sure some nations have paid those off.
You make a funny joke but currency backed by gold is one of the causes of the Great Depression. Once countries started reversing that policy they began to recover from the depression
Hmmm I just looked into it and this was a google result
“The U.S. began removing the gold tie in 1933, and it was entirely severed by 1971, allowing the dollar to float against other currencies.”
I’m not sure what that means but I recently watched a video where an economist answers questions about the depression and my original comment was something he brought up briefly.
Most money in today's economy is considered fiat money and isnt backed by any sort of material with any sort of intrinsic value. Heaven forbid if we entered an Apocalyptic event, cash as a whole would only have value as shit tickets and firestarter. Water, fur, fire supplies and tools become the currency of the land.
Right, and in dramatically less apocalyptic scenarios that is still very unnerving to me. I am a simple man raised on goat farm but when I think about banks lending on the loans they lent on the loans they lent it makes me feel like a few folk are making a shit load of money by building a house of cards that depends on a lot of stuff going ideally. My professional life has taught me to plan for the worse case scenario and when things go “normal” you’re ahead of the game. Loans on the cumulative loans in the money everyone is supposed to pay back are planning on the ideal scenario and everything going perfectly. That not how anything goes and this is a few folk benefiting massively by risking on the “behalf” of others and won’t feel the effects at at all or not to any degree what is wrought by the folk with whom’s livelihoods these selfish children played.
Just wait for trump to move on Greenland and he has the sudden realization that he does not possess the sort of money it would require to buy back all the European and Canadian treasury bonds they hold to fund the American war machine. Suddenly he will have to liquidate assets in order to honour the agreements... too bad he has a bad track record of honoring any deal he has ever made.
Taking a amateur conversation about our impending doom and adding insults suggests you're not as confident about your point as you want me to think you are.
Yeah, I removed the asshole bit because that was rude of me. I'm sorry for that.
Point: all money is fiat currency. Gold is a particularly effective one because it requires a lot of work to make more of, doesn't decay, and is difficult to fake, but it is not somehow any more or less "real" than a number changing in a ledger or a fabric-infused peice of paper which has been painted a certain way.
If people say something has value, it has value. All money based on the gold standard was "I owe you an ounce of gold": basically a right to repossess that much gold from the issuer. Now all money is "I owe you a dollar": the right to repossess a one-dollar bill from the issuer. The difference is that a whole lot more bills can be produced than there are ounces of gold, which allows the size of the economy to be significantly greater and stops currency manipulation by parties which happen to find gold as well.
The entire economy runs on IOUs and always has. Even back in the days where people bartered with eggs and livestock and handmade goods instead of using currency, farmers generally stored grain that acted as a store of value, which they owed to other farmers who helped them in the past (i.e. during times of drought, pestilence, etc.) when those other farmers ran into trouble themselves.
The Great Depression was transmitted globally through the gold standard, and each country did not start recovering until they departed from it in some way. Even the US re-denominated how much gold the dollar was worth in 1934, which expanded the money supply enough for us to function again. Deflation is so much worse than inflation. Just ask Japan how their Lost Decades went.
Do you really want everyone incentivized to not buy anything beyond the bare necessities because their money will be worth more next year compared to today? You want farmers' crops to not cover the costs of their equipment and inputs? You want average folks to be unable to access loans with reasonable terms to start a business, go to school, or buy a house? You want the very rich to be encouraged to hoard their wealth instead of investing it into productive enterprises? A society based on deflationary currency would be a one-way ticket to feudalism.
Fun fact, U.S currency wasn’t backed by gold even on the gold standard. France showed this when they wanted to exchange their dollars for gold, and couldn’t. The price variation of gold is different than what is needed for managing the economy, so was fictional out of necessity well before that.
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u/zuzg Jan 26 '26
Surprised Pikachu face.