We all use it, it is the usual way in which we acquire services and goods on a daily basis. We trade our time for it. We trust it to provide our future, we hold it in the belief that it will still have value in the future. It is our currency, be it dollars, euros, whatever, but it is not as reliable as you think. Look, I am by no means a qualified financial advisor or guru by any means, but I will explain to the best of my ability; You should start looking for other forms of investment to secure your financial future.

fiat currency

All national currencies are called fiat currencies. What does this mean? Well, the Investopedia definition of a fiat currency is:

“Currency that a government has declared as legal tender, but is not backed by a physical commodity. The value of fiat money is derived from the relationship between supply and demand rather than the value of the material from which the Money. Historically, most coins were based on physical products like gold or silver, but fiat money is based solely on faith. Fiat is the Latin word for “will.” – investopedia.com

Basically, that sheet of paper in your pocket is exactly that, a sheet of paper that is based on your faith that you will continue to have the same purchasing power tomorrow as you do today. So what’s wrong with that?

The fiat currency, unfortunately, has had a long history of failure. Since the Roman Empire in the 1st century began the practice of debasing your currency (adding impurities to your money, thereby reducing the value but increasing the amount of currency in circulation) it has led to devaluation and eventual collapse.

Maybe you are thinking that today could not be happening, I am sorry to tell you that it is. Our history has had several failed attempts to use paper money and fiat currencies have never been successful, except for political systems that try to avoid debasing their currency by letting the printers run amok.

However, it is not all doom and gloom. I’m also not saying this will save everyone, but if you look at countries like China that are hoarding gold, maybe we should follow in their footsteps? We all know that gold is valuable and that there is a limited quantity on our planet, this allows it more stability than fiat currency. Gold has also shown steady growth throughout its life.

As I said, I am by no means a qualified financial advisor, I am just expressing my thoughts and how I feel. And I feel like there is a definite change in the way the world economy is moving right now. I can’t say if it will happen tomorrow or in the next 10 years, but I am sure it will. So maybe it’s a good idea to create a secure foundation for your financial future. Hope for the best and prepare for the worst.

For your success.