Guyana still supports Fiat currency reserves

Dear Editor,
A letter writer, Seth Sampson, asks, ” Why doesn’t Guyana have a gold reserve with all the gold we produce?” The short answer is that our financial officials still support fiat currency, despite its historical reputation for causing hyperinflation. And that trend continues.
The price of gold has increased by 100% over the past couple of years and currently sells for about US$4,000/oz, meaning that the value of the dollar, a fiat currency, has decreased by 50% over the same period. By comparison, all other fiat currencies have likewise decreased, including the Guyana dollar.
Fiat currencies, also known as paper money, get their “value” from a decree by a government authority. It’s so because the government says so. But one important attribute of money is its being a store of value, the expectation that it will command the same amount of goods and services tomorrow as it did today.
But clearly, that’s not the case, as seen recently by Venezuelans, Argentinians, and others around the globe. Voltaire, the 18th-century French philosopher, correctly described fiat currency as paper money that “eventually returns to its intrinsic value: zero. ”
Gold prices are increasing as central banks abandon US$ reserves for gold and silver (silver prices have had similar increases over the same period). These banks sense that the con of printing numbers and letters on a piece of paper and telling users that the one with US$100 printed on it has 100 times the value of another with US$1 printed has lost its appeal. They are rushing to dump US dollars for precious metals and are holding gold reserves instead.
BRICS countries, representing almost half of the world ‘s GDP, are studying gold-backed currencies among their membership. As usual, Guyana is late to the party and consequently will be impacted negatively despite its oil because it is priced in a fiat currency, the $US.

Sincerely,
Louis Holder