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"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
by 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 agoYou 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?