And who "holds dollars"? Do you keep them stashed under your mattress?
...
100% wrong. If you really think that, I'd be happy to take all those worthless counterfeit bills off your hands, I'll even spring for the postage! For some reason, no Ron Paul supporters have taken me up on that offer yet, I wonder why?
If you have bonds, you hold dollars. The bonds have fixed yields. Some 20 trillion dollars in bonds are held by Americans. When the dollar is devalued, this money evaporates.
This wealth is like a huge croud in a burning building. Some people near the exit can save themselves. Most are going to burn to death. It's a question of whether the place blows up in flames, or whether they just get slowly baked. Either way the vast majority is going to be wiped out.
Regarding the conterfeiting, the point is that by creating more dollars out of thin air, that makes all dollars in circulation worth that much less. That's the essence of inflation.
During the 1971 to 1980 period gold went from some $42 per ounce to up over $800. All the conditions are worse now than then.
I know this is scary stuff, hard for you to believe. It's because the government has been cooking the numbers. The economy is crashing even as we speak. You need to study about economics more --
real economics, not the Keynsian voodoo economics taught in colleges and promoted by the Federal Reserve. Read "Crash Proof" by Peter Schiff. There is no safety in numbers. The middle class in the USA is going to get royally screwed over. It's actually ongoing.
Pay attention to the housing bubble. ARM mortgage defaults. Fixed rate mortgage defaults. They're all ballooning. The derivatives scandals have only just begun. The whole mess is unwinding. Some 400-500 trillion dollars in derivatives are getting wiped out.
Anyway you made a point about gold backing. There is a really good chance precious metals will get accepted as monetary metals again.
I suggest reading Jason Hommel's various essays here:
http://www.silverstockreport.com/ssrarchive.htm
He's a real silver enthusiast, but he's got a lot of useful information on the economy. Take a look at
http://www.europac.net/
Read the articles in the "Economic & Market News" it's a story of doom and gloom. The mainstream media is just beginning to cover this stuff.
In times of economic upheaval, gold will always be remembered.
This stuff is real, I'm not making it up. Do your own research.
-Dave