The Bailout And You

Fiat Currency:

Fiat currency or fiat money is money that is not backed by any tangible object of true value, such as gold. Instead, the money itself is declared as having value by the government or other authoritative entity that issues it.

This system works as long as the entity is seen as trustworthy and capable of carrying out it's obligations. The system can break down when obligations are no longer able to be fulfilled or when the authoritative entity declares the money to no longer be of value (devalues the currency).

The United States completely converted to a fiat currency in August 1971 when the U.S. Govenment under Richard Nixon abolished the remaining aspects of the Bretton Woods Accord which based our currency on the value of Gold.

This web site makes no attempt to argue the advantages or disadvantages of fiat money versus specie-backed representative money, except to inform the public that our currency in it's present status is untested at these levels. And we like to pose the question, "Once all of this currency is in circulation and preserving the health of large corporations, what is to stop inflation from wiping out the middle class?"

Here is the Wikipedia page on Fiat Currency: Fiat Currency Wiki

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