|The Daily Show with Jon Stewart||Mon - Thurs 11p / 10c|
|Zero Dark Appointees|
I like Jon Stewart and think he has been very funny over the years, but what he and other don't seem to understand is our money is NOT based on gold in Fort Knox or some buried national treasure, it's based on NOTHING but the goodwill of America!
That's correct, since President Nixon took the US off the gold standard the US Dollar has been a fiat currency. Fiat money is money that derives its value from government regulation or law. The term fiat currency is used when the fiat money is used as the main currency of the country. The term derives from the Latin fiat ("let it be done", "it shall be").
From 1944 to 1971, the Bretton Woods agreement fixed the value of $35 United States Dollars to one Troy Ounce of gold. Since then some say the US Dollar has had a de facto oil standard, referred to as the Petrodollar. The idea is based on the fact that all barrels oil are sold in United States Dollars on the international market, but there is no set amount of oil backing a dollar.
The Petrodollar system came about because of the United States overwhelming military power and an arrangement President Nixon made with the Saudis. Some say this is also the hidden reason why the US is so adamant about maintaining control over the Middle Eastern region. Some like former Congressman Ron Paul have gone as far to say the real reason for the Iraq War was Saddam Hussein threatening to sell oil in Euros. Similar claims have been made about Moammar Khadafy.
Furthermore we have had a fractional banking system since 1913 that lets banks just create money out of thin air even when it was based on a gold standard. The way it works is say Bank A has $10 dollars, and John Smith wants to borrow $100 dollars. Bank A then tells the Federal Reserve they need $90 dollars, then Bank A loans John Smith $100 [their $10 dollars and the $90 dollars the Federal Reserve just printed up]. They do however have to maintain a reserve or balance amount according to Fed rules, the current reserve rate is 12%. How much money could you make if you could do this? This is literally the single largest wealth transfer mechanism in human history.
The point of all this is minting a trillion dollar platinum coin is exactly the same thing the Federal Reserve does on a daily basis, create money out of thin air, the only difference it is the Treasury doing it, not a private bank. My question for Jon Stewart is why is it OK for a private bank to create money out of thin air but not the very institution given sole authority to do it by the US Constitution?