Well, the quick answer would be by force of arms.
"What keeps it from crashing?"
The fact that people who need money to survive are willing to accept and use the FRN's as they would genuine money. Somewhere down the line the face value of the FRN's will eventually have to be paid by someone somewhere.
Remember, an FRN is an I.O.U. -- a promise to provide future labor or deliver lien-free goods or services in exchange for the goods and services you are trading it for today.
It's really that simple. Buy today, pay tomorrow. The FRN is not payment, but only a promise to pay -- a simple little debt contract dressed up in all those pretty colors and pictures to make it look more impressive than money itself. (Yea, verily, more valuable than gold itself.) ;>
So if someone gives you an FRN, you have an option of trying to cash it in right away by presenting it to the person(s) whose signature is on it, demanding that they stop what they are doing and start mowing your lawn or painting your house or repairing your car until the full face amount of the FRN is satisfied by their labor (or goods and services) . . .
or
you can pass on the FRN to someone else for goods and services and let them worry about cashing it in.
Naturally, everyone opts for passing it on to someone else to worry about, and that is what keeps the wheel of debt turning. Besides, it's illegal to force the government agents (employees) who created the FRN to mow your law, etc. They are protected.
"Is everybody stupid (the world) or just more comfortable not asking the question?"
I'm guessing that half the people don't know how to frame the question and the other half don't know there is a question to be asked.
"Nixon stopped backing the dollar with the gold standard when france called in their chips and wanted gold since the dollar was backed by gold, correct?"
Wouldn't you want gold in payment rather than someone's I.O.U. too? Of course! Because gold represents labor already performed and can be exchanged for lien-free goods and services, whereas the FRN is evidence of a lien remaining on the goods and services because they were purchased on credit.
(Trying to keep things simple, but the principle holds.)
Silly me, I should have thought of that.
The fact that people who need money to survive are willing to accept and use the FRN's as they would genuine money. Somewhere down the line the face value of the FRN's will eventually have to be paid by someone somewhere.
You've thrown a new one at me. I had to google what it was. FRN, I'm assuming you were speaking about 'Floating Rate Note' as there are a couple of abbreviations to choose from.
Looking further, Wikipedia also explains what it is.
Now, that's out of the way, how do you collect on an FRN-with paper dollars? It makes me dizzy, but I like trying to figure it out.
You have been so helpful and I thank you.
Meant to ping you.
LOL! Where did it ever say that the signer of your FRN has any obligation to anyone?
Besides, it's illegal to force the government agents (employees) who created the FRN to mow your law, etc. They are protected.
So it's not an option. That was quick.
whereas the FRN is evidence of a lien remaining on the goods and services because they were purchased on credit.
A lien on who?