Dave Manuel Logo
Saturday, November 01, 2014
Click Here to Subscribe to My Free Newsletter

DaveManuel.com BLOG POSTS
FRONT PAGE
ABOUT
SEARCH
CONTACT ME
SPECIAL FEATURES
INTERNATIONAL
ARTICLE ARCHIVE
BLOG POSTS
DICTIONARY
POLITICIANS
POL. NET WORTH
OTHER NET WORTH
U.S. DEBT CLOCK
NEWSLETTERS
DEALS
U.S. UNEMPLOYMENT
INFOGRAPHICS
NEWSLETTER
ADVERTISE
ARTICLE FEED
BLOG FEED



Definition of Fiat Currency







What is fiat currency? What is the definition of fiat currency? What exactly does "fiat currency" mean?

A fiat currency is a currency that is not convertible into anything else (such as a metal like gold or silver). Fiat currency is also declared to be legal tender by the government that issues it.

The US Dollar, Euro and Japanese Yen are all fiat currencies because:

1) they are not legally convertible into anything else (such as gold and silver)
2) they are declared to be legal tender by their respective governments

-- Finance term definition - Fiat Currency --The first fiat currency is believed to have come from the Song Dynasty in China in the 10th century.

The problem with fiat currencies is governments can simply print more notes whenever they feel like it, due to the fact that a dollar or a Euro or Yen aren't convertible into something like gold or silver.

Fiat currencies are essentially useless, only retaining value due to the implicit banking of the governments that issue them.

If a government decides to turn on the printing presses, these fiat currencies quickly lose their values because there is nothing tangible that is backing their value.

Look to Zimbabwe as an example of a country with a fiat currency that has essentially made all of their outstanding notes worthless through hyperinflation.

If you had 100,000 Zimbabwean dollars sitting in your bank account ten years ago, these dollars are almost completely worthless due to the printing presses. These 100,000 dollars had no tangible value, due to the fact that there was nothing backing them that was of any value.

The only "backing" that they had was from the Zimbabwean government, and the government essentially made the notes worthless by firing up the printing presses.

If a government loses control and hyperinflation runs rampant, then the value of a fiat currency can quickly become worthless, as there is nothing of tangible worth that is backing its value.


Davemanuel.com Articles That Mention Fiat Currency:

None


Click Here For Hundreds More Definitions




Most Recent Articles

Posted on: 2014-11-01 07:03:00
Washington Post "Election Lab": Republicans Have 95% Chance of Winning a Senate Majority
Facebook Logo - Blue on White - 400 pixels wide
Posted on: 2014-10-29 02:51:00
Hiccup? Facebook Falls 8% After Releasing Q3 Earnings Report
Ebola Virus - Photo - Black and White
Posted on: 2014-10-27 03:42:00
Gallup: Ebola Now a Top 10 Issue For Americans
United States Congress Building - Capitol Hill - Side view on a sunny day - Photo
Posted on: 2014-10-23 00:04:00
CBO: Net Interest Payments on Federal Debt Expected To Hit $800 Billion By 2024
USA Deficit approaching 18 Trillion Dollars
Posted on: 2014-10-20 04:40:00
US Debt Load Approaching $18 Trillion





Twitter

421
Twitter $$


SPECIAL FEATURES

Debt Ceiling Changes (1940-Present)

United States Debt Clock

Where Did The DJIA/NASDAQ/S&P 500 Trade On..

Historical GDP Numbers for the United States

Historical Spending Increases

US Government Spending Breakdown 1962-2015

History of Deficits and Surpluses in the U.S.

History of Debt In The United States

Largest Foreign Holders of US Debt

Historical Gold Prices

Inflation Calculator

What Did It Cost?

Hedge Fund Filings

Historical Unemployment Rates in the United States

Historical State Unemployment Rates

Canada Debt Clock

A History of Bank Failures in the United States

Dow Jones Historical Data

Nasdaq Historical Data

S&P 500 Historical Data

Median Household Income History

House of Representatives History

Compound Interest Calculator

List of Failed US Banks 2014

Historical Unemployment Rates in Canada

UK Debt Clock

Intragovernmental Holdings

Historical Fed Funds Rate

Historical Bitcoin Prices

Financial Twitter Alerts




BLOG POSTINGS

Las Vegas: Democrats Currently The Favorites To Win in 2016

Los Angeles Clippers Likely To Fetch $1 Billion+ in Sale

Mark Cuban Not Sweating His Lack of Involvement in Box IPO

Vince McMahon a Billionaire Once Again

Parsing Obama's 2014 State of the Union Address

NHL Franchise Values Continue To Soar

Twitter To Trade Under TWTR Symbol

Shares of Tesla Drop on Downgrade, Car Fire

More Problems Arise For JC Penney

AMC Networks Basks In Glow of "Breaking Bad" Finale



INTERNATIONAL

Etoro Rezension

Os Dois Principais Corretores de Forex no Brasil

Meus Corretores Forex Brasileiros Favoritos



POLITICAL NET WORTH

Ted Cruz Net Worth

Marco Rubio Net Worth

Hillary Clinton Net Worth

John Boehner Net Worth

Paul Ryan Net Worth

Rick Santorum Net Worth

Newt Gingrich Net Worth

Mitt Romney Net Worth

Ron Paul Net Worth

Joe Biden Net Worth



OTHER NET WORTH

Lionel Messi Net Worth

Rand Paul Net Worth

Dr. Dre Net Worth

Wayne Rooney Net Worth

Johnny Manziel Net Worth

Stephanie McMahon Net Worth

Satya Nadella Net Worth

Paul Allen Net Worth

Adam Silver Net Worth

Peyton Manning Net Worth

Jay-Z Net Worth

Winklevoss Twins Net Worth

Chris Christie Net Worth

Adrian Peterson Net Worth



MOST RECENT DICTIONARY ENTRIES

Downtrend

Battlebus

Ballot Box

Market Timer

Annex

Cold Storage

Asset Allocation

Surge Pricing

Vault Cash

Hot Wallet




CREDIT CARDS AND OTHER SERVICES

The Top Three Online Stock Brokers In Canada

The Top Two Forex Brokers in Canada

PersonalLoans.com Review

Economist GMAT Tutor Review

MyHosting.com Promo Code

Media Temple Special Offer Code

Etoro - Tap Into The Power of the World's Largest Social Investment Network

Certified Hosting Promo Code

Yahoo! Web Hosting Coupon Code

Hostpapa Coupon Code

Hostgator Coupon Code

Fatcow Discount Coupon Code




ARTICLE ARCHIVES

Blog Posts

Company Reviews

Daytrading

General Knowledge

General Market News

Health + Fitness

Hedge Fund News

Internet Companies

Making Money Online

Motivational

Online Forex Trading

Real Estate News

Stock Market Education

Stock Market Scandals

The Economic Meltdown

Trader Profiles



DaveManuel.com - Copyright 2014, All Rights Reserved | Advertise | Privacy Policy | Disclaimer