LovNMoney

Fiat money, on the other hand, is any money whose value is determined by legal means rather than the relative availability of goods and services.  However, it has an advantage over commodity money in that the same laws that created the money can also define rules for its replacement in case of damage or destruction. Fiat money is also closely tied to government borrowing for expenditures that do not have a clear social return, or which may have negative expectations, such as wars of conquest.  Fiat money is also associated with attempts to control trade: If individuals possess notes which are not redeemable outside of the control of a government, the idea is that they will have to purchase preferentially within the boundaries of the nation, rather than importing.  Fiat money is symbolic of a commodity or government promises and is less savable and can discourage long-term savings altogether, since its future value is always in doubt.  Fiat money tends to create huge bubbles, which, when they collapse and ”they always collapse” lead to extended depressions and severe hardship, especially for ordinary working people and  hurt savers and those on fixed incomes, who find the value of their dollars steadily eroded by the Fed's printing presses.

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