This page is a digest about this topic. It is a compilation from various blogs that discuss it. Each title is linked to the original blog. Get matched with over K angels and 50K VCs worldwide. We use our AI system and introduce you to investors through warm introductions! We help large projects worldwide in getting funded. We work with projects in real estate, construction, film production, and other industries that require large amounts of capital and help them find the right lenders, VCs, and suitable funding sources to close their funding rounds quickly!
We help you study your market, customers, competitors, conduct SWOT analyses and feasibility studies among others! Get a FREE list of 10 potential customers with their names, emails and phone numbers. When it comes to the concept of fiat money, one of the most interesting relationships to analyze is the one it shares with Gresham's Law. This economic principle states that "bad money drives out good," which means that when two forms of currency are in circulation, people will hoard the one that has the most value and use the other to pay for goods and services.
This dynamic has significant implications for fiat money , which is not backed by a commodity such as gold or silver and instead relies on the government's guarantee of its value. Here are some key insights to consider when examining the relationship between Gresham's Law and fiat money :.
Fiat money can drive out commodity money: In a situation where fiat money is in circulation alongside commodity money such as gold or silver , people may hoard the commodity money and use the fiat money to pay for goods and services. This is because the commodity money has intrinsic value, whereas the fiat money only has value because the government says it does.
This can lead to a situation where the commodity money disappears from circulation, which can have significant economic implications. Gresham's Law can apply to different forms of fiat money : Even within the category of fiat money , Gresham's Law can still apply.
