Terms

Fiat Currencies

Fiat
Currency

Fiat Currencies are currencies issues by governments that are not backed by hard assets (like gold), but are backed by faith in the government

More About Fiat Currencies

  • Fiat currencies are only money because governments say they are.  They do not meet the traditional requirements of money
    • They do not have an intrinsic value - they'd be worthless without the backing of the government


Risks of Fiat Currencies

  • They can be issued in unlimited volumes (and thus lose value to inflation)
  • Most countries are technically bankrupt (2018), so it's likely they will print more to pay bills