“Once upon a time, most paper currency in the world was backed by gold and directly exchangeable for it. On August 15, 1971, US President Richard Nixon ended the Bretton Woods System (Ghizoni, 1971), in what is now known as ‘The Nixon Shock’, allowing all currencies to float freely, with only the backing of the faith and credit of their issuing sovereign state. This type of currency is known as ‘fiat currency’, i.e., currency that is given value by government decree (Keynes, et al., 1978). This report will not discuss the relative merits and drawbacks of gold-backed currency and fiat-money, only the triple-bottom-line impacts of each.”
http://www.coindesk.com/microscope-real-costs-dollar/
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