What is Fiat Currency?
In the world of Economics, one thing is certain, Gold is Money. So how about that piece of paper you have in your wallet, that one that we all call “Money”, is it really a valid Currency? The answer to this question leads us to one of the best kept secrets in the world of money, which is that a currenct is only as good as whatever it is backed with. Money can be created of Gold and therefore backed by the content of the coin itself. Money may be backed by Gold and be fully convertible to Gold. Money can be asset-backed, or fully convertible to some underlying asset or lastly, Fiat based.
You can hear the answer right here: 
I will, of course, fill in the answer in great detail here at some point in the near future, but for now, I ask you to refer to my audio lesson at www.tenminutelessons.com for the podcast version of the answer.
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