“The Latin term ‘fiat’ roughly translates to ‘there shall be.’ When we refer to fiat money, we are referring to money that exists because the government declares it into existence. It is not based on production or earnings, and not backed by any commodity. It is solely based on trusting the government. Fiat money is exchanged in the economy as long as there is faith in the government that issues it. Some are blaming the recent shakeup in the markets to ‘whining’ or financial fear-mongering, which misses the whole point. History has shown that fiat money, or ‘faith-based currency’ always fails, because when governments claim this power, they always behave irresponsibly.” (07/25/08)