Where is all the "Money" located in the U.S., and is there actual reserve to back all of the money made?

George WwwowwW wrote:

There are trillions of dollars floating around the U.S....is this money just numbers in a computer somewhere, or does it exist? And is there actual reserve to back all of this currency? And if not, why the hell are we trading paper with president faces on it for goods?

There’s nothing backing the dollar now I’m afraid.

And with another record rise in the federal deficit to £1.65 trillion adding to the misery - the point of no return has been reached.

Alf Shrubb wrote:

George WwwowwW wrote:

There are trillions of dollars floating around the U.S....is this money just numbers in a computer somewhere, or does it exist? And is there actual reserve to back all of this currency? And if not, why the hell are we trading paper with president faces on it for goods?

There’s nothing backing the dollar now I’m afraid.

And with another record rise in the federal deficit to £1.65 trillion adding to the misery - the point of no return has been reached.

http://www.washingtontimes.com/news/2011/feb/14/debt-now-equals-total-us-economy/

What do you mean when you say there is nothing backing the dollar? Do you know why gold is valuable?

It is said to be the most impregnable vault on Earth: built out of granite, sealed behind a 22-tonne door, located on a US military base and watched over day and night by army units with tanks, heavy artillery and Apache helicopter gunships at their disposal.

Since its construction in 1937 the treasures locked inside Fort Knox have included the US Declaration of Independence, the Gettysburg Address, three volumes of the Gutenberg Bible and Magna Carta.

For several prominent investors and at least one senior US congressman it is not the security of the facility in Kentucky that is a cause of concern: it is the matter of how much gold remains stored there - and who owns it.

They are worried that no independent auditors appear to have had access to the reported $137 billion (£96 billion) stockpile of brick-shaped gold bars in Fort Knox since the era of President Eisenhower. After the risky trading activities at supposedly safe institutions such as AIG they want to be reassured that the gold reserves are still the exclusive property of the US and have not been used to fund risky transactions.

In other words, they want to be certain that the bullion has not been rendered as valueless as if a real-life Goldfinger had stolen it.

Racehorse wrote:

There’s nothing backing the dollar now I’m afraid.

And with another record rise in the federal deficit to £1.65 trillion adding to the misery - the point of no return has been reached.

From the link itself:

That would be 102.6 percent of GDP — the first time since World War II that dubious figure has been reached.