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While I mostly agree with you... >The US Dollar has never been 100% backed by any metal. This is not accurate but the devil is always in the details. What exa

by kapone 1y ago

While I mostly agree with you... >The US Dollar has never been 100% backed by any metal. This is not accurate but the devil is always in the details. What exactly does "backed by" mean? If we mean pre Bretton Woods (1971), then, for all intents and purposes it WAS backed by Gold, not just a promise. The federal reserve could not conjure up fiat dollars on theirs (or anybody else's) whims and fancies. Pre-1971 US dollars could be freely traded/swapped for gold at any bank at the then rate of 1oz of Gold = $35. This was written in stone. Of course, then Nixon did what he did in 1971, and as they say the rest is history. p.s. The Bretton Woods Agreement/system/whatever you wanna call it, came into being in the aftermath of WWII, in 1944. This was [1] essentially an agreement that those 44 countries will use the US dollar (and by correlation, the USD<->gold peg) as long as the (US) powers that be didn't fuck it up. p.s.2 - A lot of people don't realize that these accords were what established the IMF, and the beginning the World Bank, BIS etc. So, what happened in 1971 and what did Nixon do? "On August 15, 1971, President Richard M. Nixon announced his New Economic Policy, a program “to create a new prosperity without war.” Known colloquially as the “Nixon shock,” the initiative marked the beginning of the end for the Bretton Woods system of fixed exchange rates established at the end of World War II." - per US Office of the Historian. So, yes, things can change due to government actions, and yes Bitcoin and its peers could be rendered worthless in a heartbeat, if the power that be want it. >What really backs the US dollar is the US military Agreed. But as always there's a time factor. This was true around that time, but not so much today in 2025. While the European military assets are not worth talking about, China and Russia both have continued developing those assets and do present an equalizer today. Are they equal to/better/worse than the US military is somewhat of a moot point. They exist. That in itself is the point. [1] - The Bretton Woods system of monetary management established the rules for commercial relations among 44 countries, including the United States, Canada, Western European countries, and Australia,[1] after the 1944 Bretton Woods Agreement until the Jamaica Accords in 1976. - As per Wikipedia.

bluGill 1y ago
It was generally understood by 1970 that the US didn't hold enough gold to fulfill the promise. You as a normal person couldn't go to any bank and get 1oz of gold though, only other countries could do that and they didn't in large amounts and so it worked out despite there not being enough gold in the US. In the 1800s 1oz of gold was tradable for $20. The $35 figure was already accounting for some inflation despite the backing (I don't recall the year it changed, but sometime in the 1930s seems reasonable) $1 used to be tradable for 1oz of silver. since silver and gold have different supplies though sometimes you could (in the 1800s) make a lot of money from this.
- AnimalMuppet 1y ago
  > The $35 figure was already accounting for some inflation despite the backing (I don't recall the year it changed, but sometime in the 1930s seems reasonable) January 31, 1934. But first the US Treasury took over the US gold supply from the Federal Reserve.

by kapone 1y ago

bluGill 1y ago

It was generally understood by 1970 that the US didn't hold enough gold to fulfill the promise. You as a normal person couldn't go to any bank and get 1oz of gold though, only other countries could do that and they didn't in large amounts and so it worked out despite there not being enough gold in the US. In the 1800s 1oz of gold was tradable for $20. The $35 figure was already accounting for some inflation despite the backing (I don't recall the year it changed, but sometime in the 1930s seems reasonable) $1 used to be tradable for 1oz of silver. since silver and gold have different supplies though sometimes you could (in the 1800s) make a lot of money from this.

AnimalMuppet 1y ago
> The $35 figure was already accounting for some inflation despite the backing (I don't recall the year it changed, but sometime in the 1930s seems reasonable) January 31, 1934. But first the US Treasury took over the US gold supply from the Federal Reserve.