Why does the US dollar rely on gold??

Question

in other words, why is The US dollar based on the gold standard? why gold? please be specific im trying to impress a teacher ;D for economics class

Answer 1

The US Dollar is based on debit only . The fractional reserve banking system . Gold is the gage used in determination of the worth of any currency .

Answer 2

Definition of the Gold Standard

My normally extensive Economics Glossary does not have an entry on the gold standard, so we'll have to look elsewhere for a definition. An extensive essay on the gold standard on The Encyclopedia of Economics and Liberty defines the gold standard as "a commitment by participating countries to fix the prices of their domestic currencies in terms of a specified amount of gold. National money and other forms of money (bank deposits and notes) were freely converted into gold at the fixed price." A county under the gold standard would set a price for gold, say $100 an ounce and would buy and sell gold at that price. This effectively sets a value for the currency; in our fictional example $1 would be worth 1/100th of an ounce of gold. Other precious metals could be used to set a monetary standard; silver standards were common in the 1800's. A combination of the gold and silver standard is known as bimetallism.  

Answer 3

the USD went off the gold standard...probably before you were born.  But if you want to know why gold is so valuable, its because its a commodity that is impossible to fake/counterfeit, and its been used for 1000s of years.    On average it probably takes about a weeks worth of work to find an ounce of gold (give or take)   Anyone whos gone out looking for gold knows how hard it is to find and how much work it takes, so the work is judged accordingly.   Gold really has very little value in terms of its use except that its pretty (and i guess nowadays is used in some electronics)

Isnt it funny how we place value on the most useless things and no value on the most valuable things?  For instance, a diamond has no real purpose.  It cant be used for anything really but its very expensive.  Water is something that every human in the world needs, but its pretty much free wherever you go.

Answer 4

The US abandoned the gold standard many years ago. Where have you been?

Answer 5

Gold is just a valuable commodities that has always been valuable and used as a standard of wealth. However the US abandoned the gold standard in the 1930's.