Fiat currency is paper money backed by nothing but faith. Today every world currency is backed by nothing but pure faith, unlike prior to 1971 when currency was at least partially backed by gold. Today all currency is nothing but paper.
Fiat currency is designed to lose value to permit the central banks to inflate away the debt they create. This means, you as a saver of money in the bank, are having your wealth stolen from you every day by the central bank’s inflationary creation of new currency.
Gold and Silver have been the preferred money since 680 BC. In times of great economic chaos, as with the German Weimar Republic, those with 25 ounces of gold could buy an entire city block of downtown Berlin. Those with paper currency became poorer as those with gold became richer. As Mike Mulloney wrote in his book, Guide to Investing in Gold and Silver, “during financial upheaval, a bubble popping, a market crash, a depression, or a currency crisis such as this one, wealth is not destroyed. It is merely transferred. During the Weimar hyperinflation, gold and silver didn’t just win, but smashed their opponent into the ground, by delivering yet another devastating knockout blow to fiat currency. Thus, those who held on to real money, instead of currency, reaped the rewards many times over.”
“Through the many economic debacles in human history runs one common thread: those who financially survive do so because they own gold.”
-Michael J Kosares, the ABCs of Gold Investing.