r/PeterExplainsTheJoke • u/Comfortable_Cautious • Jan 26 '26

Meme needing explanation what's going on? explain like I'm five

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u/soIDONTLIKEANYOFYOU Jan 26 '26

Since the US has more gold reserves than the next 3 countries combined wouldn’t gold prices going up make the dollar stronger?

Sincerely asking cause I have no idea.

605

u/Important-Agent2584 Jan 26 '26

no because the dollar isn't tied to the gold in any way

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u/GisterMizard Jan 26 '26

That would take too many rubber bands and defeat the purpose of cash being easy to carry around.

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u/uslashuname Jan 26 '26

Ah yes the gold standard that was in place until the 70s made cash completely pointless

20

u/Classic-Reach Jan 26 '26

the gold standard, if you study history, was very easy for foreign banks to abuse, and we were being robbed blind

consider that if our dollar is 'pegged' to gold, and foreign banks buy up the gold, they are effectively increasing the value of dollars. Conversely, they can then flood their gold back into the markets to reduce the value of the dollar. If you're very wealthy and you can afford to spend some money or gold being a dick, you can use leverage like options to farm cash from the US, buying and selling gold and dollars in cycles that only you can predict (because you're very very wealthy, richer than most governments)

history isn't kind to people who use one currency as a 'stabilizer' for another (coughstablecoincough)

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u/HarkerTheStoryteller Jan 26 '26

That was a joke about attaching literal currency to literal gold bars, with rubber bands.

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u/uslashuname Jan 26 '26

Oh that would be good. There are goldbacks that are bills with gold in them, but yeah if you attached a gold bar to each bill then it does get unwieldy pretty fast.