Doug Levinson: What gives a dollar bill its value?

What gives a dollar bill its value?

The value of money is determined by how much (or how little) of it is in circulation. But who makes that decision, and how does their choice affect the economy at large? Doug Levinson takes a trip into the United States Federal Reserve, examining how the people who work there aim to balance the value of the dollar to prevent inflation or deflation. [Directed by Qa'ed Mai, narrated by Doug Levinson].

A hundred dollar bill is just paper until society agrees on its value and limits its supply. Its worth depends on how much currency circulates compared to the goods and services people want to buy. After the US dropped the gold standard in 1971, the Federal Reserve, not Congress or the President, took charge of managing the money supply. Getting this balance wrong leads to inflation or deflation, with serious consequences for jobs and prices.