I am going to answer this as simple as possible. FIAT money is money that is NOT backed by anything tangible. Sounds scary, right? Well it is scary! Our money right here in the US was once backed by gold, but President Nixon took us off the gold standard. This means that our currency no longer has anything of value to back it up other than the full faith and credit of the United States.
The photo above shows a One Hundred Trillion Dollar bill from Zimbabwe. This is an example of what happens to Fiat currency when the country just prints money that is not backed by anything to pay its debts. ( Sound Familiar? QE1, QE2,QE3 etc…)
FIAT money is also called FIAT currency. If you guys need more information on FIAT money or FIAT currency, just leave comments below and I’ll come back and do another blog post on the subject. I’m just trying to keep this simple, and for the purpose of buying gold or silver, just knowing that FIAT currency is money not backed by anything is just what you need to know. This helps create volatility in our monetary system and is an important factor in decisions many people make to buy gold and silver.