Posted by Allison on 13 April 2009, 11:30
Currency is a fascinating topic to start researching, and you may be familiar with the fact that the monetary system we have in place at the moment is one which operates on fiat money. Fiat money is basically a currency which isn't backed up by anything, unlike the Gold Standard of years ago when the US dollar was worth a specific amount of gold.
The video “Gold VS Dollar – The Truth About Money” aims to enlighten us on that very topic, and it does a very good job of it as well. It is only a little over five minutes long and yet there is plenty to chew over here, as you will see when you watch it.
The narrator tells us what life was like when the American dollar was backed by the Gold Standard in the 1800s. The value of the dollar hardly changed for nearly sixty years during that time, and this certainly points to the fact that gold always has had (and always will have) its own value. If the dollar is pegged to that, then it cannot in theory experience the ups and downs that it can all the while it is backed by nothing, which is what is true of today's money.
The video is very well put together and very watchable, since it relies on specific images to get our attention, as well as revealing facts and figures on screen. The narration goes into some depth and yet it doesn't lose us on the way, merely describing how fiat money and that which was backed by the Gold Standard have differed greatly over the years.
There is even a hint of a conspiracy theory thrown in for good measure at around the one minute mark, discussing the interesting fact that the value of gold went down around the time of the Great Depression in the late 1920s and early 1930s, which some think of as having been engineered to get the American people on the side of a monetary system which operated on fiat money alone.
However as the video points out, the decline of the Gold Standard was a gradual one – it wasn't until the early 1970s that America abandoned it altogether under the presidency of Richard Nixon.
Now while it might take a while to really get your head around what it means to be on the Gold Standard or not on the Gold Standard, the narrator of the video makes it abundantly clear in just a few seconds. All you need is a picture of a yellow Corvette and some gold coins, and you will soon see how much the value of the dollar has gone down in the years since it has become a fiat currency and not one backed by a commodity such as gold. We won't reveal what that car would have cost you in the US had the dollar still been on the Gold Standard, but let's just say you may become a fan of the Gold Standard very soon!
This is a fascinating look back at the days when having certain currencies tied to gold and silver was par for the course, and many people think that if things had stayed that way we wouldn't have been faced with the problem of inflation which always comes back to haunt us today.
This video is so good that you can forgive the creator the hard push towards spreading the news at the end, since they have no monetary reason for doing so (except for the content of the video itself of course!).
It obviously is catching people's attention because at the time of writing it had a five star review and more than thirty people had reviewed it at that point. All of the comments it had received were extremely positive, which given the fact that videos on YouTube can attract somewhat negative or redundant reviews on occasion, is a testament to the quality of this contribution.
You can view the video at http://youtube.com/watch?v=nzMURWASuJ0 and it is well worth doing so. You may not have been taught about fiat currency and what it is at school, but all you need to do is watch this five minute video to understand how it works.
And it is worth remembering that even if you don't live in the US or use their money on a daily basis, if their economy collapses due to having no more than fiat money in their pockets, it will undoubtedly affect the whole world as a result.