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Fiat Currency

Fiat currency is debt that is not backed by anything of value other than trust and reputation.

Fiat Currency

In the past, printed money was backed by precious metal deposits, and coins were minted in metals that had actual intrinsic value. The U.S. Dollar, and the money of most nations today, are no longer backed by precious metals, but are minted by "fiat" and backed only by the "full faith and credit" of their respective nations of origin. In other words, fiat money has no intrinsic value, its value is imputed to it by the strength of the national economies that back it. In recent times, central banks, the issuers of fiat currencies, have issued enormous quantities of fiat currencies, diluting their value by decreasing their scarcity.

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