U.S. Dollar Is A Fiat Currency

Brief History of the Gold Standard in the United States

Congress Link : https://fas.org/sgp/crs/misc/R41887.pdf

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Introduction

The U.S. monetary system is based on paper money backed by the full faith and credit of the federal government. The currency is neither valued in, backed by, nor officially convertible into gold or silver. Through much of its history, however, the United States was on a metallic standard of one sort of another. On occasion, there are calls for Congress to return to such a system. Such calls are usually accompanied by claims that gold or silver backing has provided considerable economic benefits in the past.

This report briefly reviews the history of the gold standard in the United States. It is intended to clarify the dates during which the standard was used, the type of gold standard in operation at the various times, and the statutory changes used to alter the standard and eventually end it. It is not a discussion of the merits of such a system.

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Cutting the Links to Gold: 1967-1973

“The new $42.22 par value was made official in September 1973, long after it had been de facto abandoned. The official rate was never maintained. In October 1976, the government made official what was already true in reality: the definition of the dollar it terms of gold was removed from statute.59 The monetary system officially became one of pure fiat money.”