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Is the end of fiat money coming? What is fiat money? In the case of money, the government prints bills, stamps a value on the front, and tells everyone that these objects should be accepted as payment for goods and services.
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Fiat money is government-issued currency that is not backed by a physical commodity, such as gold or silver, but rather by the government that issued it. The value of fiat money is derived from the relationship between supply and demand and the stability of the issuing government, rather than the worth of a commodity backing it as is the case for commodity money.
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Fiat currency definition What is a fiat currency? A fiat currency is a national currency that is not pegged to the price of a commodity such as gold or silver. Learn how forex trading works Find out more about forex trading, including what currency pairs are.
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Banking and the expansion of the money supply Video transcript - [Voiceover] Let's take a look at a United States one dollar bill. What is it that gives this thing value? You can give it to people and get back, ya know food that you can eat, or things that you can use, and things of hard value.
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During the 11th century, the government established a monopoly on its issuance, and about the end of the 12th century, convertibility was suspended. Although the notes were valued at a certain exchange rate for gold, silver, or silk, conversion was never allowed in practice. The government made several attempts to maintain the value of the paper money by demanding taxes partly in currency and making other laws, but the damage had been done, and the notes became disfavored. The founder of the Yuan Dynasty, Kublai Khanissued paper money known as Jiaochao during his reign.
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