“Once . . . money had backing and intrinsic value. You could redeem a United States dollar bill for a dollar’s worth of silver or gold, albeit a small amount, and thus the money had intrinsic value.”

I would argue that nothing, absolutely nothing, has intrinsic value (I’m not discussing the value of people here). Any value an item has is only present when placed there by people.

So, it doesn’t matter if we’re speaking of gold or dollars, the only value the item has is what you and I agree to place on it. When U.S. currency was backed by precious metals, it didn’t give the currency intrinsic value. Instead, it merely meant the government would exchange the currency for a certain amount of the precious metal. Only because the public placed a value on the precious metal did this have any meaning at all.

As you say, the value of money is based only on what others think that value is, and this is true for everything. If Person A needed water and what Person B wanted was food, B would only take gold from A in exchange for water if B thought that others valued the gold enough to trade B food for the gold. B wouldn’t take the gold from A because the gold had any intrinsic value. Same with currency, whether backed by precious metals or not.

Thank goodness we don’t live in other times when things like butter, salt and rats were used for currency.