From wikipedia:
The term fiat money is used to mean:
- any money declared by a government to be legal tender.[1]
- state-issued money which is neither legally convertible to any other thing, nor fixed in value in terms of any objective standard.[2]
- money without intrinsic value.[3]
The term derives from the Latin fiat, meaning "let it be done", as the money is established by government decree. Where fiat money is used as currency, the term fiat currency is used. Today, most national currencies are fiat currencies, including the US dollar, the euro, and all other reserve currencies, and have been since the Nixon Shock of 1971.
China is the last victim fall under the U.S. 'trick' to accept the US fiat money/bonds. Once again, do you care money without intrinsic value that rules the financial world? I think everyone love to see millions of USD even it is only paper that declared by USA government to be legal tender. The fiat currency also provide a playing ground for people to play with it which has created the world largest transaction financial market: FOREX Market.
