Question

Please explain the pros and cons of having a fiat currency. Is it safer than a gold and/or silver backed currency? Do most fiat currencies experience hyperinflation?

Answer 1

Ans

The main advantage of fait currency is its stability. It can be changed according to economic conditions. During recession we can increase its supply and during inflation we can restrict its supply. It is also cheap as expensive metals are not involved. The main problem is this currency is not backed by real things like gold. Further it often leads to inflation and excessive printing of money. It is not safe I. The sense that counterfeit currency can be easily printed particularly by enemy nations.

No hyperinflation is rare. Inflation is found quite often but that is due to mismanagement of Govts