Essay on Fiat Currency And The Gold Standard

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Fiat currency and the Gold Standard
By historical definition currency has either been backed by an asset (i.e. gold) or backed by government guarantee in credit, which is essentially just promise of value. Money being backed by gold or other assets has consistently retained its value and inflation rate. On the other hand, “fiat currency” (money not guaranteed in value by physical commodity) has shown to be more elastic to cater to economic needs. There are cons as well: gold is a very scarce resource. When the world relied on the gold standard, the countries with large reserves of gold prospered while the developing nations fell behind because they lacked gold. Fiat currency is no saint in the matter of our economy either. It has been manipulated to benefit the governments, banks, and corporations through inflation and credit crises while the citizens of the nation face the debt. Throughout history, the gold standard has had its ups and downs, but with the capability of limitless printing, credit expansion, and political influence, our current fiat standard is causing more financial trouble than ever.
Today, the U.S. dollar is nothing more than a synthetic material marked with numbers indicating purchasing power. When you go shopping, you are trading paper with numbers printed on it for goods. And every year the dollar loses strength, with no avail to reducing inflation. Our “fiat” money system (money with no backing) had been in play since 1973, when Richard Nixon removed…

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