Our currency is called fiat money. Fiat money is regulated by the government through the Federal Reserve. Fiat money has nothing to back it but debt. Our money used to be backed by gold and silver.
Accordingly, is the US dollar backed by gold?
Since 1971, U.S. citizens have been able to utilize Federal Reserve Notes as the only form of money that for the first time had no currency with any gold or silver backing. This is where you get the saying that U.S. dollars are backed by the “full faith and credit” of the U.S. Government.
When did we leave the gold standard?
No country currently backs its currency with gold, but many have in the past, including the U.S.; for half a century beginning in 1879, Americans could trade in $20.67 for an ounce of gold. The country effectively abandoned the gold standard in 1933, and completely severed the link between the dollar and gold in 1971.
What replaced the gold standard in the US?
The gold standard is a monetary system where a country's currency or paper money has a value directly linked to gold. The gold standard was completely replaced by fiat money, a term to describe currency that is used because of a government's order, or fiat, that the currency must be accepted as a means of payment.