Can someone please explain Fiat Currency?

[Shimmy]

I have a good idea of how it works, but I need to put it in simple terms for my conservative friends out there.

 

[pedro]

Basic; paper issued to facilitate trade among consumers, not backed by any actual commodity. Used to be the currencies of the US were gold backed, you could turn in your paper and obtain metal. There is not any metal value behind the federal reserve fiat 'float'. Yet they print more daily, and as a result, the quantity in circulation dilutes the trading value. That's fiat currencies, basic.

 

[N. Cognito]

Like Pedro says, it's money printed without anything of real value to back it up.

The Germans printed money like crazy and caused a level of inflation that required a wheelbarrow of money to buy a loaf of bread (according to rumor) so they could quickly pay off their debts according to the Versailles treaty in worthless papers. In the U.S., the "Fed" prints fiat money as part of a scheme that confiscates savings through inflation and generates revenue for the shareholders, and is 'backed' only by debt.