The federal reserve note states it’s value on the note: “This note is legal tender for all debts, public and private”
That means under force of law, anybody who deals in goods and services is required to accept the note in exchange for those goods and services.
Yes, that requires there be a government to enforce the legal requirement, and does allow for a change in value if people require more notes to purchase an item than they did previously.
Notes have the same type of value as would a contract for delivery of goods or services, for a bond, for a promisory note. (Not the same value, I mean similar in “type” of value it has — a FRN is the most secure of this type of instrument, given the full backing of the US).
On the other hand, a FRN is explicitly a medium for exchange. Gold is a commodity used for exchange. So it should be compared to other commodities, many of which have a higher direct value to the average person than gold. Like if you had a basement full of long-shelf-life food items, and a house that was fully paid off, and a large underground storage tank of oil, you already have everything you need to survive the next 20 years, even if nobody will trade you for anything. But you can also use those items to trade for other items if you want.
If things get so bad that U.S. currency is worthless, which would you rather have — a basement full of food and water, or a few dozen bars of gold?
Exactly. The intrinsic value of the FRN is the threat of force.
If things get so bad that U.S. currency is worthless, which would you rather have — a basement full of food and water, or a few dozen bars of gold?
The former until the emergency is over and the latter afterward. It reinforces the need for a more difficult to tamper with and non perishable store of value. Bernanke bucks can be declared worth less to worthless on a whim. They will be inflated to the limit.