if there were a million dollars of money in circulation the U.S. Treasury had a million dollars in gold.
What happened when the United States was taken off the gold standard, was the fact that the Federal Reserve Bank to print up as currency because they felt the problem needed to back it up with nothing, but on some kind of imaginary money. This increases the supply of foreign currency, decreases the value of which would have required more money to buy the same thing, which is called inflation.First of all, most people think of currency is money. When one of these metals refineries, the metal contact and make some money, I do not receive money. It is not necessary. Money is simply a medium of exchange. It allows you to transfer the value of a thing to another thing. In times past, bales of hay was the currency. A sheaf of grain was currency, the chickens were the currency. They are the means of exchange, but now I think that nobody would try to buy a car with a whole truckload of grain.