England UK

"Arthur Dent" <fd4scy@yahoo.co.uk> wrote in message
news:1153585340.355715.10870@s13g2000cwa.googlegroups.com...
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> Modern money is backed by debt, rather than gold.

Money today is no more backed by "debt" as it is backed by goods or gold,
for that matter. For example, you can take your money to the market and buy
anything you want, including gold. The idea that money is back by debt stems
from the mistaken belief that all money is borrowed into existence. The fact
that the Fed's balance sheet shows the bank holding a huge amount of
Treasury debt as an asset and FRN's as its major liability is only an
accounting reality, not to be confused with the economic reality of an
actual policy to swap debt for money or vice versa upon demand from the
public.