3 ms·
By acquiring whatever backs the money and printing money that represents it. In other words, the treasury would buy gold from somewhere else, and create money r
by zaphod4prez 9y ago
By acquiring whatever backs the money and printing money that represents it. In other words, the treasury would buy gold from somewhere else, and create money representing that value. This is how our monetary system worked when it was gold- & silver-backed. Now it's a fiat system, where there is no reserve of some asset held to back the currency ("out of thin air").
- antonvs 9y agoThat "backing" is nonsensical. A currency is a proxy for the wealth in an economy. All that using gold or silver to "back" it does is cause the price of that commodity to rise to reflect the size of the entire economy. As such, the "intrinsic" value of the commodity is irrelevant - it may as well be paper. Which is why that's what it now is.