Most people think that currency and money are the same thing. They’re not. This video from Mike Maloney will educate you on how currency differs from money. I too thought that money and currency were interchangeable terms for the same thing.
All currencies used around the world today are fiat currencies:
Fiat money has been defined variously as: Any money declared by a government to be legal tender. State-issued money which is neither convertible by law to any other thing, nor fixed in value in terms of any objective standard. Intrinsically valueless money used as money because of government decree.
Basically, the currencies we now use have value because we all agree that they’re worth something. It’s value by consensus. The currencies are not backed by anything. Nixon detached the Dollar from Gold in 1971 and since then, no currency has been backed by anything other than hot air.
Historically, every fiat currency has returned to its intrinsic value: zero.
Precious metals (money) do have intrinsic value and have done so since recorded history began over 5,000 years ago. Every time a currency starts becoming worthless, people go back to buying and trading in gold and silver. It’s happened repeatedly throughout history.
And it looks like it might be happening again…