[quote=AK]You alarmist fool, the U.S. dollar is backed by … um … I dunno, Treasury bonds or something?[/quote]
It is backed by the ability of the U.S. economy to output goods and services, and by the ability of the federal government to tax such output.
One dollar is approximately equal to the one fifteen trillionth of the total annual output of the economy.
In this sense, it has a lot more intrinsic value than an equally priced quantity of gold. One U.S. dollar will buy you half a gallon of milk. (Because it takes one fifteen trillionth of the annual economic output to produce, package, and deliver that amount of milk.) You can’t eat or drink gold. Gold mostly has value as a social construct, because people agree to consider it valuable.
