[Texaggie79]

Who backs our currency?

[Ben Bolt]

Tex , it goes to more to the what as opposed to the question of who . when you break it down to the bottom line the issue comes to the coining of money .

[nunya bidness]

All you had to do was click on the link I provided but you didn't.

Don't make me pull out the Doctor Evil pictures again. Scott.

[Pelham]

American currency isn't backed by anything right now. It's worth is only a function of people's faith in the American economy, and their desire to hold the money that is used in it. If the Fed reverted to its behavior during the 70s, when it was directly purchasing debt from the Treasury (which is currently illegal), we could have another nasty inflation. But unlike in the early 70s, you are now free buy bullion if you don't trust the American dollar. Bullion, like currency, is non-interest bearing. Unlike currency it's not as easily spent. But if there is an inflation, it should protect you from having your savings lose buying power.