CB -
No, our currency is backed by bank reserves, which consist of not only Treasury securities (the promise of the federal government to pay, aka monetizing federal debt), but also other types of securities and real assets such as gold, mortgages, and commodities, and foreign currencies.
You're likely technically correct, but aren't we talking about a 2 or 3% level of backing? If I take a $20 bill (Federal Reserve Note) to a bank, I may be able to convince them to give me two 10's, but probably not much else.
Regards, Don |
