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<p>[QUOTE=&quot;NorthKorea, post: 1300176, member: 29643&quot;]1) The dollar (as most take it to mean) is represented by Federal Reserve Notes. FRNs are backed by debt issued from the US Treasury.</p><p><br /></p><p>2) I claimed five different elements that parlay into the value of the USD. Also, all currency officially issued by the US (which invalidates the $10,000 notes that were thrown out in a fire)&nbsp; govt for circulation is valid to this day. Since wartime &quot;Hawaii&quot; notes were withdrawn from circulation (and redeemable), I assume they would be classified akin to the $10,000 note.</p><p><br /></p><p>By contrast, the Russian gov&#039;t revalued its currency in 1995, making old rubles worth 1/1000 of new rubles. Given that 1 USD ~ 30.5 PP, that would mean that 1 USD ~ 30,500 PP without revaluation. This would imply that the number of rubles in circulation vastly exceed the number of dollars, thereby rendering your argument mute.</p><p><br /></p><p>Basically, even if the aggregated holdings of the Russian Federation exceeded that of the US govt by a factor of 10:1, the circulating currency would render the ratio to reflect a US dollar having a strength of value of 100:1 against the ruble.</p><p><br /></p><p>3) I don&#039;t understand your point. The US gov&#039;t holds 8100 tons of gold. That&#039;s good for third on the list in terms of %age (74.7%) of FOREX accounted for by gold... the two countries ahead of the US are Portugal and Greece. For your argument, Russia has 6.7% of their FOREX assets backed by gold. China has 1.7%.</p><p><br /></p><p>The key issue destroying faith in the dollar is that the US economy is based upon debt. This was a question I asked Goldman Sachs in 2007 related to the spread of the carry trade to the retail sector. I was told the debt would come from somewhere else should it dry up. This is a PRIVATE SECTOR financier. This isn&#039;t a problem of the US gov&#039;t. US gov&#039;t spending is driven by private contracts. If the US gov&#039;t spends a dollar, it results in $5 of commerce. The argument of a smaller gov&#039;t for the sake of economic stability has never been proven. I&#039;m a conservative. I advocate for state&#039;s rights. I also understand that we can&#039;t shutdown the US gov&#039;t until the private sector figures out a more efficient distribution of assets.</p><p><br /></p><p>Lastly, the problem with US debt is how it&#039;s derived. It&#039;s primarily money owed to Social Security. However, no one wants to decrease/delay Social Security benefits with the sheer mass of voters that baby boomers represent.</p><p><br /></p><p>Edit: BTW, Fatima, what aspect of the US&#039;s involvement in Libya did you find to be a violation of the US Constitution?[/QUOTE]</p><p><br /></p>

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