It says on the treasury’s own website that federal reserve notes aren’t redeemable for gold, silver, or any other commodity. But this conflicts with basic economic law. When you are using money as a medium of exchange you are using your federal reserve notes to get commodities. So wouldn’t that mean that every time you buy something on the market that you’re breaking the law? Unless I’m missing something…
Congress has specified that a Federal Reserve Bank must hold collateral equal in value to the Federal Reserve notes that the Bank receives. This collateral is chiefly gold certificates and United States securities. This provides backing for the note issue. The idea was that if the Congress dissolved the Federal Reserve System, the United States would take over the notes (liabilities). This would meet the requirements of Section 411, but the government would also take over the assets, which would be of equal value. Federal Reserve notes represent a first lien on all the assets of the Federal Reserve Banks, and on the collateral specifically held against them.
Federal Reserve notes are not redeemable in gold, silver or any other commodity, and receive no backing by anything This has been the case since 1933. The notes have no value for themselves, but for what they will buy. In another sense, because they are legal tender, Federal Reserve notes are “backed” by all the goods and services in the economy
http://www.ustreas.gov/education/faq/currency/legal-tender.shtml