By: I. B. Zoxx

I. B. Zoxx — Tue, 30 Nov 1999 00:00:00 +0000

That was once the case (paper money backed by gold, and coins that contained a metal content close to face value), but it is true no longer. No country in the world backs their banknotes with gold or any other metal (Switzerland was the last country to abandon the gold standard, in 1999). In fact, only a few countries maintain a gold reserve big enough to back more than a few percent of their debt.
The US dollar is backed by "the full faith and credit of the United States government". Creating large quantities of new currency should lead to inflation and making the currency already in circulation worth less. Zimbabwe is an extreme example of what happens when government prints massive quantities of banknotes - 100 Trillion Zimbabwe dollars from January 2009 are now worth about 30 cents US.
By the way, US banknotes are printed on a cotton fiber substrate.

Comments on: Money, Currency, Gold ect.?

By: I. B. Zoxx