Why does the dollar bill say Federal Reserve Note?

Question

What is a Federal Reserve Note anyways?

Answer 1

It is to back the american economy

Answer 2

A note in the financial world is a promise to pay. For example, if you borrow money to buy a car or a house, you sign a "note", promising the financial institution that you will pay them back under the terms of the note.

The dollar bill you have is a note from the Federal Reserve Banks to pay you. The Federal Reserve is a private entity established by the US Congress in 1913 via the Federal Reserve Act of 1913.
Prior to the establishment of the Fed Reserve Banks, people had "US Notes" issued by the US Treasury Department.

Some people would say the US financial system has been controlled by private banks ever since then. Let me give an example. Say they issue $1 million (by fiat, meaning, arbitrarily, with no gold to back up the money). The US government borrows this $1 million to pay for its expenses (payroll, building dams or roads, etc).
In exchange, the US government issues bonds back to the Federal Reserve The bond payment is more than $1 million because the Federal Reserve charges interest. Say the interest is $50,000. So now there's $1 million in circulation. but where would the government get this $50,000 .... since all money is issued by the Federal Reserve to begin with. Therein lies the problem.

Answer 3

The money is placed into circulation by Federal Reserve banks. So that makes it a note (another word for money/bill) from the Federal Reserve.

Answer 4

A dollar bill is a paper representation of its worth being held in the federal reserve bank.

A note is another word for a Promissory Note. Which is a promise that this bill is worth the $1 that is being held in the Fed Res Bank.

Answer 5

Money is printed by the Federal Reserve. And I think it's called a Note because it's supposed to represent gold in Fort Knox. Anyone else know? Now I'm curious!

Answer 6

It is an IOU note to the Federal Reserve? Like borrowing or credit so we can get deep into debt on credit and the foreigners can invest and take everything?
Go to www.history.com it is imperative you read this for your own self to understand how we were sold out years ago by your friendly politicians of the Euro Trash heritage. look up President Woodrow Wilson? He signed it through coercion by his advisers and he admitted, after he signed the end of the Silver Certificate, he said he made a big mistake and was sorry he sold us out! Dig it Man? It is cool to see how we are all getting BS about the deficit, there is none? We are running on empty, we don't have a gold base or a silver base, not really? Just credit, Duh? and plenty of Nukes and ammo. Civil war is on the way? Oh yes I forgot? All we really have is this land, and that is all and we have been sold out here as well throughout the Reagan administration and then Bush Sr. and then Bush Jr. Clinton put a law into effect to keep the Federal lands and reserves for us, and Bush tore it up and has been selling it to foreign governments just like Reagan and Bush Sr, did in Washington State to the Koreans? The whole of SeaTac Airport surroundings has been bought up as of 1992, by the Koreans. Here is a good one. Our major battle ships are manufactured by a Korean as well? Duh? Get it we are sold Americans always enslaved by the left over Euro trash that are americans but loyal to the New World Order and the Euro trash relatives they left behind.

Answer 7

Because it is issued by the Federal Reserve (not by a bank) and it is a note (not an actual piece of valuable metal).

Answer 8

Before the 1930's, bills were 'certificates' in that you could walk into certain banks and trade it's face value for equal sums of gold or silver. Roosevelt changed that by removing the gold standard. Now, bills are merely notes representing the amount the market value says it equals. That's why the government can print money on demand now.

Answer 9

It's hard to even read the idiocy spewed by "babaloo" much less let you possibly think he got anything right.

FDR took us off the gold standard in the sense of no longer being able to walk in and exchange your currency for some amount of gold. No more promise of allowing that and no more doing that. But... we still limited the amount of currency issued to an amount per ounce of gold (owned by the US government) that was set by international agreement. I believe it was $32 per ounce.

Nixon removed that link. He took us off any kind of link to an underlying item of value. Since then, the US government has been legally allowed to issue any amount of currency the international market will take. If we issued just any old amount we felt like printing up, the dollar's value would fall, rapidly, and then even more rapidly. You'd see monstrous "inflation" of prices, DVD's suddenly costing $238,000 instead of $20 perhaps and you'd better buy it right now because this afternoon it could be $43,888,000, that kind of thing. So there is a limit on the Fed in practice. None of them want their families chased into the mountains and themselves rent, limb from limb.

As for Nixon and deficits, Nixon had a budget sent to Congress (in 1973 I think) that carried a $4 billion shortfall in $303 billion of spending. Shocking... actually, it DID take a lot of explaining at the time. Nothing like baba-bozo says.

And to present the idea of Bush offering a $21 trillion deficit? What a scuzz and liar. Our GDP is barely half that. And he's not even presenting that as the total for the budget, just for the budget's shortfall! So his imagined budget must be even bigger, eh?

Sadly, people read that trash and believe it must be in the ballpark. Hope some of the above helps with that and with your question. Simply put, the note is essentially a promise by the US government to exercise its stewardship of the nation, and economy, and the world, insofar as the international trade we rely upon is concerned, in such a responsible way as to keep the value of the note roughly the same as when you got it. Lol, sort of simply. Nothing more, but also, nothing less.

And like some of the above, this has been mentioned also: it is called a Federal Reserve Note because the Federal Reserve issued it.


Added:

My word, another idiot has responded. (Sigh) All those gold bugs out there, the conspiracies that hound their lives or at least their... thinking. For lack of a better word!

We are off the gold standard for a very simple reason: the value of human work and toil has exceeded the ability of gold to represent. Once upon a time, we produced more gold, at times far more gold, than the rate of increase in the net value of human work and toil. So we could match the gold up to it by paying with it directly or with stand-ins like currency tied to gold. But as the modern age began an exponential rise in the value of human work and toil we lost that ability. Not only did it start to way outpace gold production, but if we DID find enough gold every year to represent it, the gold would begin to no longer be pretty rare and desirable and would lose intrinsic value at a faster and faster rate as we found the larger and larger amounts of it needed to match net human output (increase, net of depreciation and ruination). So we'd need even more and that would speed up the spiral. To maintain the system, humans would have had to shift off gold to something else rare, perhaps an enriched uranium standard. But then that would arguably have no intrinsic value and we seek again for something...

It had to be done for that very simple reason. Whether it was ever satisfactory or not is VERY questionable. Whether it was useful in reining in the reigning gangsters of history we called kings and emperors is not - it did. But we have a different and better world now. And it cannot include a gold, silver, or any other such standard to restrict money supply.

As to why it happened when it did (FDR at the early middle of the Great Depression and Nixon at the end of 13 or so years of steady inflation), people tend to leave things like this alone until disasters force us to throw them away and replace them with something better. Neither really had a choice, and so, neither did the opponents of the changes. Would that we responded to changing conditions before disasters, but...

Answer 10

the federal reserve is responsible for our currency; printing it, deciding how much to print, and also being responsible for paying for it upon it being turned in. Money used to be backed by the government having a gold supply or silver on hand in case notes were returned for payment, but now the government is just responsible.

Answer 11

It is the representation of actual value like gold supposedly.
Realistically we are a nation of debtors.
We are indebted to the Federal Reserve Bank.