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Replace TBills with gold - is it still being created out of thin air? The point is it’s backed by an asset

• dmichulke 9y ago
  Did the fed dig out the gold nugget? If not, there is now more dollars chasing the same amount of goods. Yes it's still backed but less than before, i.e., devalued.
  • alexasmyths 9y ago
    "Yes it's still backed but less than before, i.e., devalued." No. 1 Trillion in Assets = 1 Trillion in Currency. 1 Trillion + 1 dollar in Assets = 1 Trillion + 1 Dollar in currency. No dilution by the Fed. (Fractional lending notwithstanding - that's another can of worms)
    • dmichulke 9y ago
      You do realize that you are backing a dollar with a dollar? But you cannot eat a dollar or play games on a dollar or drive with it. In and of itself a dollar is just a piece of paper and has an intrinsic value of say 1ct. So adding a paper note to the economy increases the backing by 1ct and the currency by 1$. Adding an iPhone increases the assets by say 100$ (just made that up by taking 500$ cost - 400$ used materials) and leaves the currency as it is. Hmm, now that I think of it: Are you maybe talking about accounting?