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<p>[QUOTE=&quot;fatima, post: 1326153, member: 22143&quot;]I recommend that you re-read my post as you obviously didn&#039;t get it.&nbsp; &nbsp; I clearly said that Federal Reserve Notes are not redeemable for gold and it&#039;s irrelevant to the point that I made.&nbsp;&nbsp; I did say that central banks, when doing business with each other, (and they must do this) do not use the confetti, the $, they print up for the populations.&nbsp; They use hard assets and gold is one of those assets.&nbsp; This is the only trust between central bankers and their currency.&nbsp;&nbsp; It&#039;s a difficult concept to understand because of decades of obfuscation that surrounds it.&nbsp;&nbsp; </p><p><br /></p><p>You base this on your observation that you can&#039;t take a $ to the bank and get gold for it.&nbsp; This doesn&#039;t mean the faith in the currency doesn&#039;t depend upon backing by hard assets.&nbsp; </p><p><br /></p><p>This is proved out by the fact that the Federal Reserve and other major central banks all hold gold as an asset.&nbsp; The Federal Reserve has over 7000 tons of it listed as an asset and further more holds another 8000 tons of it for other central banks.&nbsp;&nbsp; This is an expensive, difficult and high risk thing to do for an asset that doesn&#039;t create confidence in the monetary system.&nbsp;&nbsp; The central banks of China, Russia, Mexico and a host of smaller countries are doing everything they can to increase their reserves.&nbsp;&nbsp; </p><p><br /></p><p>Finally the Federal Reserve Act requires the Federal Reserve to hold hard assets for all the &quot;base money&quot;.&nbsp; Gold is one of the few approved legal methods for this.&nbsp; If this gold was not there, then it would wreck havoc to our financial system.&nbsp;&nbsp; Maybe you don&#039;t understand the concept of base money vs circulating money.&nbsp;&nbsp; I recommend you do some reading as you are missing some important elements of the &quot;history&quot; behind the Federal Reserve and the USD.[/QUOTE]</p><p><br /></p>

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