FIAT Money Cycle vs Commodity Money Cycle

With FIAT money, the government generates the credit that it spends, and collects it back as taxes and/or has other processes to prevent inflation.

FIAT Money generated for government grants and programs can replace banks as the main source of new credit in the economy.

With commodity money, bankers generate credit loans based upon the borrower's access to assets. The government must tax or borrow from banks or Large Financial Groups to retrieve the commodity before generating the currency used in government spending.