The Changing Backing of the US Dollar: Faith and Credit Under Scrutiny

The US dollar has traditionally been backed by the full faith and credit of the United States government. However, recent events and trends suggest that this foundation is weakening, leading many to question what truly supports the dollar today.

The US Dollar is Not Backed by Faith

Faith, in broader sense, encompasses trust, confidence, and moral principles. As a Christian, and specifically an Eastern Orthodox, I observed Easter on May 5^th this year. Many Christian Americans celebrated Easter on March 31^st, the same day President Biden proclaimed Transgender Day of Visibility. This proclamation coincided with one of the holiest days in Christianity, sparking controversy and feelings of disrespect among many religious adherents.

Faith is linked with religion, spirituality and a belief in something greater than ourselves. Observing a day that contradicts Christian beliefs on Easter undermines the moral and ethical fabric that many people believe should support national decisions. Moreover, the US government’s actions, such as military interventions resulting in millions of civilian casualties, further erode the moral high ground that faith in the dollar supposedly rests on. The notion that the current administration maintains a faith-based backing for the US dollar is becoming increasingly untenable.

The US Dollar is Not Backed by Credit

The US dollar’s backing by credit is also under scrutiny. Henry Ford once said, “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” This statement highlights the complexity and secrecy of the financial system.

Here’s a simple view of how the US government’s credit system works:

1. Treasury Issues Bonds: these bonds are sold at auction.

2. Banks Buy the Bonds: Major banks purchase these bonds.

3. The Fed Prints New Dollars: The Federal Reserve creates new money.

4. The Fed Buys the Bonds: Using the newly printed dollars, the Fed purchases these bonds.

5. Bonds on the Fed’s Balance Sheet: The bonds are listed as assets on the Fed’s balance sheet.

 This cycle can look like a Ponzi scheme, raising concerns about the true backing of the US dollar. Instead of being supported by faith or sustainable credit, the dollar is increasingly backed by continuous money printing. This poses significant risks; especially given the geopolitical tensions and the adversaries the US has accumulated over the decades.

The Future of the US Dollar

To sum up, the US dollar’s backing by faith and credit is weakening. While people’s rights and freedom are important, national observances that disrespect religious sentiments can undermine the moral foundation of the currency. Similarly, a financial system based on endless debt and money printing is risky to say the least. The US must rethink its strategies to maintain the dollar’s stability and credibility in a rapidly changing world.

The goal of this week’s newsletter is to show that the US dollar is no longer securely backed by faith or credit. While advocating for individual rights, it’s crucial to respect significant religious observances and ensure the financial system operates transparently and sustainably.