It is based on government decree from "summary" of The Fiat Standard by Saifedean Ammous
The concept of fiat money is one that is based on government decree. This means that the value of the money is not backed by anything tangible, such as gold or silver. Instead, its value is determined by the government that issues it. In other words, fiat money has value because the government says it does. Fiat money is a relatively recent development in the history of money. Throughout most of history, money was backed by a commodity such as gold or silver. This gave money its value, as it could be exchanged for a fixed amount of the commodity. However, in the modern era, governments have moved away from this system and instead rely on fiat money. One of the key implications of fiat money is that it is subject to inflation. Because the value of fiat money is not tied to anything tangible, governments can simply print more money to meet their needs. This can lead to a decrease in the value of the money, as more money in circulation means that each individual unit is worth less. Another implication of fiat money is that it is subject to political manipulation. Because the value of fiat money is determined by the government, it can be influenced by political factors. This can lead to situations where governments manipulate the value of their currency for their own benefit.- The concept of fiat money is one that is based on government decree. The value of fiat money is not backed by anything tangible, and is instead determined by the government that issues it. This can have implications for inflation and political manipulation, as the value of fiat money is subject to external factors.
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