The fed is 12 banks in principle, but all 12 were created and have always been controlled by the same group of people. We don't know exactly who those people are.
They have no transparency (why don't you try to go into a Federal Reserve building sometime? You can't), they are not part of government (government is beholden to them, as government uses their money and is not willing to rock the boat and jeopardize their privilege of unlimited inflation), and we know remarkably little of their inner workings. As with everything in the modern financial sector, they say one thing is happening, but if anyone ever tries to verify or audit any of that, they are silently ignored (or silenced and ignored).
FRNs have no backing whatsoever. Originally they pretended they were backed by precious metals, but that was never real backing as it's always been a fractional reserve. They claim they have still have gold reserves, but overtly deny that anyone may redeem their notes for that gold, and they haven't let anyone see this gold in decades. Does the gold even exist anymore? There's no way to tell for sure, but if it does, there's no good reason they won't let anyone check it.
We haven't had real dollars in a century. All we have is FRNs, which is like a carton of milk without the milk in it.
The milk is bank balances. Its been that way for 50 years or so. You might think that balances in an electronic ledger is sour milk (so to speak) but thats whats there is. Its really no different from a crypto currency.
I actually didnt know they still claimed to have gold reserves, thats kind of crazy if true. I can't imagine what relevant justification there is for them to keep precious metals on hand.
history trivia -- when was the first us paper currency printed? this surprises people a lot. I think the history of the "greenback" and where the notion of a dollar bill comes from would be an OK vid for your series.
Bank balances of what, though? Of FRNs! So the 'milk' is just another empty carton. It's just cartons filled with cartons. There is no milk, anywhere. Fundamentally, the only thing backing FRNs is debt, which is to say, nothing at all, just an empty hole where they pretend something will eventually be. But government debts are never intended to be paid off (there is no asset with which to pay it), so that hole will always be empty, growing without bound, until it simply implodes.
replying here due to nesting. just like a bitcoin. Or an ether. or a steem. but there's a video about crypto coming up, so ill let you address that there.
regardless, That entry on the Feds ledger is still a thing. It exists. It can be evaulated according to your five characteristics of money.
And these ledger enteries have all five of the the characteristics you discussed.
they are divisible
they are fungible
they are widely accepted
their supply is predictable
their creation subsidizes an activity. The fed puts dollars into circulation by lending them to commercial banks, which lend them to businesses to conduct commerce.
These ledger entries can take the pepsi challenge and beat gold or silver on any of the criteria for what makes something a good unit of money.
no of dollars. money that exists on an electronic (but not distributed) ledger, just like steem or bitcoin (except centralized). WHat, did you think the crypto guys thought of it first? They didn't. All they figured out was how to make it work without a central trusted actor. A FRN is not a dollar. Anymore than a valet ticket is a car. Or those absurd coins you always see pictures of are bitcoins. The real dollar simply exists electronically.
When you give up your real dollar at the bank (the dollar of balance in their electronic ledger) the bank gives you a green valet ticket, that has no value except for the fact that somone can later go back to the bank and present it in exchange for that electronic balance that you gave up.
People deny this, even finance and economics people, but what replaced the gold in the gold standard wasn't fiat currency, it was tick marks in an electronic ledger.
The grocer takes a $100 bill because he knows he can exchange it for something that he considers valuable (a $100 entry in an electronic ledger at his bank). His bank accepts it because they know they can exchange it for a $100 entery in the fed's electronic ledger.
Precisely. At the end of the day, it's nothing but an entry in the fed's ledger, which is backed by nothing. It's an empty carton, there is no milk.