10 ms·

Could not the same question be asked about the gold held by the US government?

• jedmeyers 11y ago
  US Dollar is not backed by gold nor emitted by the Federal Government, though.
• ecdavis 11y ago
  That question can and has been asked. http://www.bloomberg.com/news/features/2015-02-05/germany-s-gold-repatriation-activist-peter-boehringer-gets-results http://www.bloomberg.com/news/features/2015-02-05/germany-s-...
  • MCRed 11y ago
    And answered.... the answer is that there was no gold, that we had sold germany's gold, and repayment schedule was designed to allow us to print the dollars and buy the gold to send it "back" to germany.
• Someone1234 11y ago
  Since the gold standard, governments are largely held together by reputation alone. If a government's reputation collapses (as has happened) then their monetary instruments (cash, bonds, etc) become effectively worthless. In the US case in particular, the US dollar is more stable because it is so popular. So even if the US government's reputation goes down, as long as third parties continue to attribute value to it (e.g. you can buy oil with gold) then the value remains relatively static. The same can be said in other stable currencies: Swiss Franc, Australian/NZ dollar, Canadian Dollar, British pound, and a couple of others.