What Exactly Is Fiat Money?
What exactly does the term "fiat money" mean?
On Google search for "define: fiat currency". Basically, it's private money, backed by nothing of substance, that can be printed at the whim of the powers that be to facilitate commerce and fund government.
Great question.. money based on faith usually on the government who issued them.
Definition of 'Fiat Money'
Currency that a government has declared to be legal tender, despite the fact that it has no intrinsic value and is not backed by reserves. Historically, most currencies were based on physical commodities such as gold or silver, but fiat money is based solely on faith.
Investopedia explains 'Fiat Money'
Most of the world's paper money is fiat money. Because fiat money is not linked to physical reserves, it risks becoming worthless due to hyperinflation. If people lose faith in a nation's paper currency, the money will no longer hold any value.
Read more: http://www.investopedia.com/terms/f/fia … z22Fc6I4Lt
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