Fiat Money is Not a Great Thing to Have

I've known for quite some time, now, that the US Dollar (USD) hasn't been 'backed' by gold for years. Consequently, the USD is rather worthless. It has been changed to fiat money or fiat currency. There was a time when the USD was based on gold, a physical commodity, which meant the USD was commodity money.  It's been stated that many of the world's woes can be attributed to the global fiat currency system.

As Wikipedia details, "Fiat money is money that has value only because of government regulation or law. The term derives from the Latin fiat, meaning "let it be done", as such money is established by government decree. Where fiat money is used as currency, the term fiat currency is used.

Fiat money originated in 11th century China, and its use became widespread during the Yuan and Ming dynasties. Today, all national currencies are fiat currencies, including the US Dollar, the Euro, and all other reserve currencies. This trend began with the Nixon Shock of 1971, which ended the backing by precious metal of the US Dollar.

The term fiat money has been defined variously as:

• any money declared by a government to be legal tender.
• state-issued money which is neither legally convertible to any other thing, nor fixed in value in terms of any objective standard.
• money without intrinsic value.

While specie-backed representative money entails the legal requirement that the bank of issue redeem it in fixed weights of specie, fiat money's value is unrelated to the value of any physical quantity. Even a coin containing valuable metal may be considered fiat currency if its face value is higher than its market value as metal.

A feature of all fiat money is its acceptability to the government for payment of taxes and charges.

Freeing Yourself From Debt: You've Got To Afford It

I discovered The Wealth Cycle Principle website, yesterday. The following video is featured within an article on that site. The simple message of the video is important, potent and completely applicable for the economy we are experiencing right now. In fact, if many more people adhered to this simple, yet profound principle we probably would not have this economic mess.

The wonderful thing about this principle is