The Constitution and the Original Monetary Act of 1792 mandates that gold and silver coins are the hard currency system and requires a constitutional amendment to change the standard. It appears than non have yet to have be enacted, and so the Original Monetary Act of 1792 still stands. The Federal Reserve Notes (U. S. Dollar Bills) are currently not backed by gold nor silver. The power holding up these sheets of paper money is the phrase “legal tender,” on the face of the note and the fact that the government and banks validate and accepts it as a source of “value.
” What this means is that a dollar bill is really not a dollar, but a piece of paper or debt money which creates the Federal Reserve Note. Another point worth considering is that the Federal Reserve is a private institution and has no real connection to the US Government as is often believed. The Federal Reserve is a department that prints money and used to be tied to the gold held at Fort Knox, now however, it is backed up by nothing.
It is thus, a fallacy to assume that a Federal Reserve Note is a dollar; it may be a dollar bill – but it is definitely not a dollar according to the gold and silver standard. Knowing this, it is reasonable to assume that the reason we are all still accepting, exchanging and treating the dollar bill like it can buy the world is due to the fact that we are living in a consensus reality. According to Steven Yates, a consensus reality is not a real reality but one that is believed to be undoubtedly true by the culture and society.
People continue accepting the Federal Reserve notes under the assumption that it contains indestructible value. The reason that a lot of people continue to accept them is due to a few factors. The complications of the economic system with its advanced language, diagrams and out of this world symbols is enough to chase the ordinary person from truly seeking to understand the true essence of a dollar’s worth. Since the Federal Reserve Notes (U. S.
Dollar Bills) are currently not backed by gold nor silver, there has to be another factor that is holding on to the value of the U. S. Dollar System. It may come as a surprise to many when they understand that the dollar bill that they are holding is merely backed up by the phrase “legal tender,” on the face of the note and the fact that the government and banks validate and accepts it as a source of “value. “
Yates, Steven (2006). Our Money System: Your Dollar Bill is a Lie! Retrieved 28, Mar. 2009, from http://www. newswithviews. com/Yates/steven12. htm