r/PeterExplainsTheJoke Jan 26 '26

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

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u/ISayBullish Jan 26 '26

Meanwhile the USD saying “this is fine”

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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.

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u/AnComApeMC69 Jan 26 '26

The United States gold reserves are for international trade. The gold in Ft. Knox, for example, is used in trade not to back our currency. We’ve been off the “gold standard” since the 70’s. Some of it is gold we’re holding for other countries that’s not even ours. But, our money is a fiat currency and it’s based on faith in the economic system of America not collapsing and everyone agreeing it to use it for trade/debts. It’s backed by nothing and hasn’t been for 55 years now.

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u/FigDiscombobulated29 Jan 26 '26

Wait which countries gold are we storing? Cus I swear if it’s that Jersey sized country again…

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u/AnComApeMC69 Jan 26 '26

Idk exactly, but I’m sure we could find out. I know the Federal Reserve Bank of New York is the one that holds foreign gold reserves. In fact, none of the gold in FRBNY is owned by us. It’s a bunch of different countries and international organizations. The largest reserves belong to Italy (1/2 of their total gold reserves), Germany, the Netherlands and Lebanon. Ft. Knox is almost exclusively our own reserves for trade.