Fiat Promises With a Gold Standard

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Fiat Promises With a Gold Standard


 by Amanda Boyer




Source: photos.comIn an economics class I took in high school, my teacher said something that surprised me. He said, “Money has value only because we believe it does.” He went on to further explain that the current monetary system that we use in the United States refers to our currency as “fiat money.”



Fiat money is a medium of exchange that gives currency value only because the government says so by its authority. The word “fiat” is a Latin word that means, “Let it be done.” The type of currency the U.S. was under previous to this was called the gold standard, which was replaced in 1971 under president Richard Nixon. The gold standard meant that the printed dollars people used day to day had a fixed value compared to gold, which the government kept in reserves to back up that money.



Often in times of economic uncertainty, people turn to gold as a sort of insurance against a financial collapse of our fiat monetary system. Have you noticed lately all the places advertising “WE BUY GOLD”?



We know that ultimately, we can’t put our faith in the value of gold or fiat money (Ezekiel:7:19They shall cast their silver in the streets, and their gold shall be removed: their silver and their gold shall not be able to deliver them in the day of the wrath of the LORD: they shall not satisfy their souls, neither fill their bowels: because it is the stumblingblock of their iniquity.). However, there is an important lesson we can learn from these two monetary systems.



In a prayer to God after building the temple in Jerusalem, Solomon said, “You have kept what You promised Your servant David my father; You have both spoken with Your mouth and fulfilled it with Your hand” (1 Kings:8:24Who hast kept with thy servant David my father that thou promisedst him: thou spakest also with thy mouth, and hast fulfilled it with thine hand, as it is this day., NKJV).He realized that God had the power to say, “Let it be done,” and the perfect character to back and fulfill those promises with action.



I believe this is the true value of a promise.



God’s promises are “unchangeable because it is impossible for God to lie. Therefore, we who have fled to him for refuge can have great confidence as we hold to the hope that lies before us” (Hebrews:6:18That by two immutable things, in which it was impossible for God to lie, we might have a strong consolation, who have fled for refuge to lay hold upon the hope set before us:, NLT).



We can put our faith in our loving God of truth, because He makes fiat promises with a gold standard to back them up.