Conrad and I were on the bus Saturday, naming compound words. I saw a bank out the window and said, “banknote.” He said that wasn’t a word, so I explained to him that paper money was originally created as a sort of IOU, so that you didn’t have to carry your gold around with you.
I told him the U.S. dollar had been backed by an equivalent amount of gold held in Ft. Knox, and that in 1971 President Nixon took the U.S. off the gold standard, at which point the value of those green pieces of paper was backed only by the full faith and credit of the United States government.
At that point I started to get confused and worried and I let him change the subject.