Episode 96: What Is Money, Anyway?
Words & Numbers
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Where Does Money Get Its Value?
A third to a half of people still respond, well, from gold because the dollars backed by gold when in fact the US dollar hasn't been backed by gold since the 1970s. That is, you can hand it to somebody and they'll give you goods and services in return. Which will not happen if you live on a country bordering Venezuela with Venezuelan currency. And once you understand that the value of a dollar comes from the goods and services it will buy, then you realize that printing more dollars simply takes the value of existing goods and services and spreads that value over a larger number of paper.
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