Fiat Judgment by Lucho Poletti

Fiat money is backed by nothing but faith and trust in the government that issued it. Fiat money has no intrinsic value unlike commodity currency. Because of this, the fiat system treats future promises of money through the issuance of debt as good as existing money because the government guarantees these future promises of money. Governments meet present financial obligations (i.e. war, bail-outs, stimulus spending) by passing these costs to future taxpayers and current savers through taxes and inflation. Through the use of legal tender laws, governments establish a monopoly on money. Governments use their monopoly on both the creation of money and on the legal use of violence to meet obligations on future income, effectively turning worthless debt into valuable money. Long story short, fiat is backed by violence.