From GoldMoney
''The issuer’s promise” is a phrase I have used recently to describe the backing for fiat currencies. The purpose of this article is to define it further, given that it is increasingly likely to be challenged in the foreign exchange markets with respect to the euro.
To begin we need to define the principal difference between gold and a fiat currency. Gold has no price when it is used as money, other than what it is exchanged for in goods. Uniquely as money, it was in demand everywhere by all societies to settle their own domestic and foreign trade. Fiat money is only used to settle transactions in the jurisdiction to which it relates, and foreigners who end up with it exchange it for their own fiat money, because out of jurisdiction it is not money''
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