How Stable Money Leads To Prosperity -Stossel/Reason
"What makes money trustworthy? 'It has to be fixed in value,' says Steve Forbes in his new documentary, 'In Money We Trust?' Forbes notes that money has to be reliable, like a clock. We have 'sixty minutes in an hour; sixty seconds in a minute. Imagine if that floated each day; that would make life chaotic.'
Stossel presents an abbreviated version of the documentary, which notes that throughout history, people needed a way to assign a fixed value to money. They tried all sorts of things, including backing money with crops, silver, and salt. 'Salt' is where our word 'SALary' comes from. Eventually, most people settled on gold, which was used up through the mid-1900s to back currency. The stability it brought to markets helped enable massive economic growth....Today, the Federal Reserve controls the supply of dollars. People use them because they trust that others will value them, and because the government says it stands behind them. But dollars are not backed by gold, or anything else. That worries people like Steve Forbes. A dollar buys 80 percent less than it did when Nixon took the country off gold in 1971. That's largely because the Federal Reserve intentionally creates 2 percent inflation every year - they set it at 2 percent rather zero because it provides a buffer against deflation, which they fear will cause recessions."
Forbes' documentary backs a return to the gold standard....You can see the full documentary on some PBS stations, or stream it at: InMoneyWeTrust.org