Central Banking

The big problem of small change

FEATURE - It is a curious fact, writes Paul Podolsky in Thursday's Wall Street Journal Europe, that the world's most trusted currency, the dollar, represents a claim on an asset no more tangible than the faith of the U.S. government. The same is true for the euro or the yen - they are all "fiat" money whose value is determined by supply and demand, not an underlying commodity.

The concept of fiat money resulted from a battle with a now forgotten foe - the once chronic instability of small change

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