Fiat currency is a phrase you hear Jason or his guests mention on podcasts every once in a while but what exactly is it? Fiat comes from the Latin “Let it be done.” In this case, it refers to a government or authority declaring that the paper currency of the nation is worth a certain amount. The scary part is that by unpinning the value of paper currency from a physical commodity like gold, what have you really got? Nothing but little green pieces of paper with George Washington’s picture on it.
What’s that worth to you or anyone else? Less and less these days and it wasn’t hard to see the dollar devaluation coming. The only way a fiat currency stays stable is if the people of the nation continue to trust in the government and believe it to be reasonably stable.
In recent months, the plummeting of the economy and world stock markets, as well as the spiraling number of foreclosures and bailouts, don’t have us out here in flyover country placing a lot of faith in anything connected with the government.
What does this mean for the value of our national fiat currency, the good old dollar made right here in the U. S of A? Nothing much except that if you think the wheels are coming off now wait until you get a taste of the inflation headed our way.
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