Fiat Currencies And The Gold Standard
Written on Jun 21st, 2010
Most people don’t realize it, but the current form of printed money we all know and love is actually worthless. While the dollar value on the paper may say $5 or $10, it only holds that relative intrinsic value because each government says it does. There are unfortunately no assets or underlying resources protecting that value, something that has the potential to rapidly destabilize any given currency in the event of an economic or wide-scale crisis. This type of currency is known as a fiat currency, and it has become the standard in the last 40 years or so. Prior to the conversion to fiat currencies though, most world currencies were backed with an actual equivalent amount of gold. This was known as the Gold Standard. In principle, I personally think the idea of a Gold Standard makes a lot more sense than currencies backed by government promises. The one […]
