Currency devaluation is a fact of life in today’s global economic environment. Why? For the first time in the history of money, all world currencies have arbitrary value. So-called “fiat currencies” are valuable, simply because someone in a position of authority says they are.
Webster’s Dictionary defines the word “fiat” as “a command or act of will that creates something without or as if without further effort.” How effortlessly the government of any country is able to fire-up their printing presses, and create something of value from a simple piece of paper! Intrinsically, fiat currencies have no value.
Meaningful to today’s intrepid investor, a fiat currency not only will not, but cannot hold its value. Historically, most fiat currencies have an “expiration date” of about forty years. An extreme, but not isolated case is the Zimbabwe dollar, which at time of issue in 1980, was worth approximately $1.50 USD. By 2009, $1.00 US would buy 3 hundred trillion Zimbabwe dollars.
http://goldsilver.com/article/a-lesson-from-starving-billionaires/
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