Ask a Question
or
Create a Poll
  1. Home /
  2. Questions /
  3. Finance
  4. / Economic Policy
  5. / Gold Standard

by Answerbag Staff on December 10th, 2009

Answerbag Staff

Question

Help answer this question below.

What is the united states currency based on?

Share:
Other

Answers. 4 helpful answers below.

  • by Lisa Dorward on December 10th, 2009

    Answerbag Experts

    Great Answer

    Professionally Researched. (What's this?)

    The United States Constitution (Section 10) requires that U.S. money be made of gold or silver. The U.S. Coinage Act of 1792 provided for the creation of the U.S. Mint and defined by statute that one U.S. dollar was worth a specific weight (371.25 grains) of silver. In 1793, the U.S. Mint commenced minting gold and silver coins.

    History

    In times of extreme debt, when the United States didn't have enough gold in reserve to back all the money it needed, it took the dollar off the commodity standard (that is, gold or silver).

    Definition

    A currency that is not tied to any commodity is called a "fiat" currency. A government simply declares that its currency is legal tender. If the currency is refused, the debt is not legally required to be repaid in any other money.

    Standard

    In 1971, President Richard Nixon ended the gold standard for U.S. currency, making it a fiat currency; and so it is today.

    Outcome

    There are no longer any countries in the world that have commodity-based currency.

    Strength

    The strength of any fiat currency is based on faith in the government of issuance.

    Source:

    Great Credit Contraction

    Kwaves

    • Like
    • Report

    1 comment | Post one | Permalink

  • by gillaspy01 on May 15th, 2010

    gillaspy01

    absolutely nothing, it is just paper that the government says we have no choice but to accept as money. They also require you to pay your taxes in the paper, building in a demand for it.

    No comments. Post one | Permalink

  • by nidhi63 on April 19th, 2010

    nidhi63

    gold reserves of the country

    1 comment | Post one | Permalink

  • by Apollo on December 24th, 2009

    Apollo

    Pop Corn

    No comments. Post one | Permalink

Want to attach an image to your answer? Click here.

Did this answer your question? If not, then ask a new question or create a poll.

More Questions. Additional questions in this category.

You're reading What is the united states currency based on?

Follow us on Facebook!

Related Ads

Related Questions

Professionally Researched

ANSWERBAG BUZZ

The value of United States currency is based on
What is us currency based on
What is the currency based on
What is the value of united states currency based on
The united states of tara answers

Answerbag

a Demand Media company