Reply #7: Like every other currency on the planet, the US dollar is "fiat" money [View All]

[TechBear_Seattle]

That basically means that our currency is not backed by any material resource and has value only because someone says it has value. Fiat money is rather like a stock: there is no intrinsic value, only the value given it by an open bidding process and how it is more or less desirable than other similar paper. When the corporation (or country) is well run, has a low debt-to-income ratio and is generally doing well, the value is high. When the corporation (or country) is poorly run, has a high debt-to-income ratio and is generally not doing well, the value is low.

I learned that in junior high school, in a "free enterprise" class that had been mandatory since the Cold War.

Still, the article is pretty funny. I especially like the blurb about the author at the bottom, about how the author is "the editor of The Mogambo Guru economic newsletter - an avocational exercise to heap disrespect on those who desperately deserve it."