======Sound Money====== Sound money is a type of currency that has a stable and reliable value over long periods, meaning it is not prone to sudden or significant depreciation. Its primary characteristic is the preservation of [[purchasing power]], protecting savers and investors from the wealth-eroding effects of [[inflation]]. Historically, sound money was often commodity-based—most famously, gold and silver—because its supply was naturally limited and could not be arbitrarily increased by a government or ruler. This contrasts sharply with modern [[fiat money]], which is a government-issued currency not backed by a physical commodity. The "soundness" of money, therefore, hinges on its ability to function as a dependable [[store of value]], a stable unit of account for measuring economic activity, and a trustworthy medium of exchange. It provides a stable foundation for an economy, encouraging saving and long-term investment over short-term speculation. ===== The Hallmarks of Sound Money ===== What gives money its "soundness"? While no currency is perfect, sound money systems traditionally share several key features that reinforce their reliability and public trust. * **Limited Supply:** This is the most critical attribute. The quantity