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You would think that money would actually be worth something. You would think that something that everyone accepts to pay for goods and services would actually have some value behind it. Well, in the case of the US currency, you would be wrong. The US has a national debt of several trillion dollars. What does that mean exactly? It means there is several trillion dollars worth of US currency in circulation that is worthless. That's right, worthless. You see, money is only as good as its backer, and in this case the backer is in severe debt. Money has an intrinsic value of a few cents since it is really only ink and paper. Hell, the penny has the most intrinsic value since it is copper and not junk metal like the other coins and it is not cheap paper like all bills! Currency gains monetary value based on the value given by the distributor of the currency; in this case the US government. Well, the distributor supposedly has something with an intrinsic value stored somewhere to give that currency value. This is why Fort Knox is a huge gold stockpile. Fort Knox holds some of the gold reserves used to give US currency value. Normally this would give US currency its monetary value as printed on the bill, but because of the US debt there is more money in circulation than there is in the gold reserve. This means that there is not enough gold in the reserves to give money its monetary value, essentially making US money worth nothing. So why does everyone accept US currency? Mainly because everyone ignores this problem and just goes ahead and accepts the currency regardless if it has any real monetary value. As long as everyone else accepts it, there is no problem. It essentially comes down to a twisted version of bartering. And to think, you are working hard or studying hard so that you can earn currency that is truly only worth the paper it is printed on. This is why you sometimes here people saying that you should invest in gold, silver, or other precious metals and gems. Since these have an intrinsic value based on its rarity, they will always be worth something. But if US currency's bartering value drops, you are out of luck. Let's just hope the world continues to buy into this deception. |