Money is anything that is accepted as a means of exchange. It can be a commodity, a receipt, a fiat (by order or decree), or fractional money. Throughout history we have seen monetary systems start as commodity money and move to receipts. In the US we used gold. But when the gold got too cumbersome to use, we deposited it in a bank and carried a receipt instead. That receipt could have been used as money because the holder could claim the gold in the bank that backed it. Banks got an idea. Since the receipts were rarely redeemed, they started issuing multiple receipts on the same gold deposits, allowing them to make loans with money they did not really have. This is fractional money. The problem was that when too many people decided to claim their gold, there was not enough to cover the claims. So the system caused instability in the economy because of the lack of confidence that the money was actually backed by gold deposits. So the solution was to have the government decree that the receipts were to be accepted as money backed by the government (fiat currency). The government would hold gold reserves to back their claim. Today, our currency is no longer backed by gold reserves.
In the book, The Plea for the Constitution, George Bancroft in 1886 (republished by Spence Judd Publishers in 1982), George wrote that the founders of our country had the evils and painful results of fiat money in mind when they wrote the Constitution. They wanted to keep the government from creating a fiat monetary system. This is because they knew that this system propagated fraud in their previous experience. They believed that forcing the people to accept a fiat currency should have considered a crime of treason punishable by death. Thomas Paine wrote about this in his "Dissertations on Government" on February 18, 1786. Our founders were clear where they stood on this, though Federal Reserve Bank materials today will lead you to believe otherwise. Despite this resolve, lawmakers today have found clever ways to justify the monetary system we now have. The 10th Amendment states "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people." Although the first draft included "The legislation of the United States will have the power to borrow money and emit bills of credit." It was hotly debated and voted down by a large majority, so it was removed. The fact that they took this action clearly left the power of issuing currency to the citizens of the United States. Alexander Hamilton comes to this same conclusion in his writing, "Works" Part II.
If you were to write your congressman today and question them on this issue, they would respond with a letter that cites a Supreme Court case from 1884, Julliard vs. Greenman, where the decision cave the Federal government justification to create a fiat currency. Since the decision went unchallenged for so many years, it is considered settled law, despite the fact that it is in direct conflict with the intent of the Constitution. This decision effectively made new constitutional law. If you tried to challenge the constitutionality of this law in your own case today, your case would be dismissed as frivolous. George Bancroft declared this a flagrant violation of the constitution in his book. Bancroft is a reliable source because he personally knew Andrew Jackson, Polk, and every president since Monroe during his lifetime. He had discussions with James Madison, John Adams, and LaFayette. He was intimately acquainted with the original intent of the constitution. So it is clear that our government has subscribed to the fraudulent practices that our founders considered a crime of treason.
As a result, we have created an unstable economy that is sooner to exaggerated swings of boom and bust that are ever increasing as we become more deeply involved in the fraud. Occasionally, this system will no longer be able to be sustained by clever manipulations of the market. This places the citizens of the US in an uncomfortable position. Either we put a stop to it, or we prepare as individuals for the coming total collapse of our economy. The best way to do this is to be completely debt free, and to keep a large portion of your net worth in hard assets that are relatively stable in price and reserve buying power, even if those assets are not enough liquid now, and certainly not liquid in a collapse. Once the monetary system is reformed, those assets will return to previous liquidity and value.