- Nearly one-third of Americans falsely believe that the US dollar is backed by gold, and 70% don’t know what is backing it.
- That’s just the tip of the iceberg when it comes to US financial illiteracy, however.
- A new study reveals just how little Americans know about how their money works.
An eye-opening new study into financial literacy reveals just how little Americans know about the US dollar – or how the monetary system works at all.
The study, sponsored by cryptocurrency firm Genesis Mining, aimed to uncover just how well the average American comprehends basic financial details about the banking system, Federal Reserve, and the dollars in his or her wallet.
Unfortunately for the reputation of the US educational system, the results weren’t all that favorable.
US Residents Don’t Have a Clue About the How the US Dollar Works
Stunningly, the study found that 29% of Americans falsely believe the US dollar is backed by gold. That hasn’t been true for decades, but at least it makes more sense than those who said that bonds (5%) or oil (4%) were backing the greenback. A further 7% responded “nothing,” while 23% admitted that they didn’t know, leaving a mere 30% of respondents stating the correct answer: the US government.
Nearly a third of Americans believe the myth that the dollar is backed by gold. | Source: Roman Bodnarchuk/Shutterstock.com
Since Richard Nixon officially scrapped the gold standard in 1971, the US dollar has been backed by “the full faith and credit” of the US Government, something which many believe to be an insufficient support. (They’d likely argue that the 7% who answered “nothing,” were, in fact, correct.)
But this wasn’t the only worrying revelation.