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Q&A: U.S. currency backed solely by confidence

PetSmart has its own charity

When checking out at PetSmart, there is an option to donate $1 toward pet rescue or adoption. Where does this money go?

Donations go to the general fund of PetSmart Charities Inc., a nonprofit foundation that was created in 1994 to provide grants to animal welfare programs.

The funds are then distributed to pet shelters, humane societies, emergency relief organizations and animal rescue groups, says Kim Noetzel, communication manager for the charity that is based in Phoenix.

Some of the grants go to national organizations and some stay within the state where donations are made, she said.

In its 14 years, the charity has given more than $70-million to animal welfare groups. This year it hopes to give out $23-million.

PetSmart Charities is a 501(c)(3) public charity that reported income of $20,423,278 during the fiscal year ending Jan. 28, 2007, with 93 percent of that coming from contributions. From that, $13,430,730 was given to animal programs. Administration took $583,611 and professional fundraising another $1,420,255.

To see more about PetSmart Charities, go to www.guidestar.org. You'll have to register to get access, but it's free and once you're on you can get financial reports on any public charity.

Currency backed by confidence

What backs our currency? I know it used to be the gold standard, but what about since that was done away with?

No physical or concrete asset, such as gold or silver, backs modern-day U.S. currency. Instead, it is backed by confidence that the Federal Reserve and the U.S. government will do their part to keep the economy, financial markets and inflation on an even keel.

People, consumers and businesses in the United States and beyond must have faith in the Fed's ability to keep prices stable. If prices remain stable and a low rate of inflation is maintained, people will feel confident that the dollar they use to buy goods and services today will buy a similar amount in the future. Similarly, people and investors need to believe that the U.S. economic, financial and political systems will remain stable because problems in those areas can erode confidence in the greenback.

U.S. citizens haven't been able to exchange their dollars for U.S. bullion since the 1930s, when the government went off the gold standard as far as domestic exchange was concerned. International convertibility of dollars into U.S. gold was stopped in 1971.

A 100-year-old record

What's the earliest a hurricane has ever formed?

In the Atlantic, on March 7, 1908. The earliest hurricane to hit Florida was June 9, 1966, Alma, which hit Apalachee Bay south of Tallahassee.

Q&A: U.S. currency backed solely by confidence 08/10/08 [Last modified: Tuesday, November 1, 2011 5:32pm]
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