The US went off the gold standard in 1971, and according to wiki, no countries back up their currency with precious metal anymore.
As I understand it, before 1971, the gold standard meant something. There physically was a 1-ounce bar of gold in Fort Knox for every 35 one-dollar bills printed by the goverment.(Am I wrong?)
But nowadays currencies of all nations are backed by, well, nothing. Except blind faith.
This particular piece of green paper in my hand is worth $20 of bacon because I believe it, the cashier at the supermarket believes it, the farmer who raised the pig believes it,the trader who bought the pork belly futures believes it, the bank who lent the capital believes it, etc.
So what’s up with all that gold in Fort Knox?