This past week I finished reading author and economist, James Rickards, new release The Death of Money. In this book he covered our modern day economy and what he sees ahead for the future of the United States Dollar. While I can’t cover every aspect of what he mentioned, one thing that stood out to me and is relevant towards rethinking the dollar is what we have come to understand as value in regards to the dollar.

The dollar, or Federal Reserve Note, in and of itself is just a piece of paper. This green colored paper even though it is small in size plays a major role all over the globe. It has this important role because of the reserve currency status it has been given by world leaders. It is because of this global pedestal the dollar sits on it has maintained value to all who uses it for commerce. This perceived value we have for the dollar as money when looked at further can be quit misleading.

In the book, Mr. Rickards gave two opposing viewpoints on what makes the dollar valuable. One term known as intrinsic I am quite familiar with yet the other, extrinsic, I had never heard of. If you understand monetary history then you know that the dollar or Federal Reserve Note has no real intrinsic value other than its perceived value as money. There is no intrinsic value to Federal Reserve Note because it is just a piece of paper that’s a claim check issued on a US Treasury bond. There is nothing in the note or about the note that truly gives it value other than the extrinsic value.

Over the last hundred years in the United States the Federal Reserve Note wasn’t the only currency that had the words value associated with it. Prior to the Federal Reserve Note being the only money available to the world; silver dollars, gold coins and United States Notes also circulated. Those alternative currencies differed in value because some actually had value intrinsically because of their composition.

Today there is no intrinsic value to the dollar but extrinsic because of the legal tender laws and government enforcement. The mandate to only use Federal Reserve Notes for all debts public and private is what gives the dollar value. The value of the dollar doesn’t come from the people having a choice, but the government saying we must use it. If there are no other options to pay your debts other than an intrinsic-less piece of paper than the value isn’t by choice but by force.

This alternative viewpoint about the value of the dollar is a very interesting point made by Mr. Rickards. As a United States citizen I don’t have much of a choice in what I use for money but the world has a choice in what it considers valuable. It’s because of the global awaking to the mandatory usage and acceptance of a valueless piece of paper that nations are beginning to rethink the dollar.  As the world continues to recognize the decreased demand of the dollar globally, it’s just a matter of time before the true value of the dollar is brought to light here in America.

The unraveling of the dollar won’t be pretty in the least. Prices of goods and services will sky rocket overnight which will be a clear indication that it’s too late to rethink the dollar. Now is the time to begin questioning the status quo. If you haven’t noticed already, prices are creeping up slowly every day. Today is the day to begin the process of getting informed on what matters. What matters is a monetary education.