The United States Mint has announced on its website that because of the very high demand for Silver Eagles it will no longer be offering proof coins until further notice.

From the US Mint:

Production of United States Mint American Eagle Silver Proof and Uncirculated Coins has been temporarily suspended because of unprecedented demand for American Eagle Silver Bullion Coins. Currently, all available silver bullion blanks are being allocated to the American Eagle Silver Bullion Coin Program, as the United States Mint is required by Public Law 99-61 to produce these coins

Fiat money is money declared by a government to be legal tender. The term derives from the Latin fiat, meaning “let it be done”. Fiat money achieves value because a government accepts it in payment of taxes and says it can be used within the country as a “tender” (offering) to pay all debts. In effect, this allows it to be used to buy goods and services and to pay tax. Where fiat money is used as currency, the term fiat currency is used. The most widely-held reserve currency, the US dollar, is a fiat currency, as are other widely held currencies like the Euro, Pound Sterling and the Yen.

Overview

Historically, societies have relied on monetary systems where currency used in trade was either commodity money, composed of a physical commodity such as gold, or representative money, exchangeable for a predetermined amount of a named physical commodity (’specie’). The represented commodity could be a precious metal such as gold, silver, or copper, although some economies have had money that was redeemable for a fixed amount of other commodity items.

While specie-backed representative money entails the legal requirement that the bank of issue redeem it in fixed weights of specie, fiat money’s value is unrelated to any physical quantity. Even a coin containing valuable metal may be considered fiat currency if its face value is higher than its market value as metal.

A feature of all fiat money is its (typically exclusive) acceptability to the government for payment of taxes and charges.

Fiat money is not essential for large countries, nor is it always used. An economy may function on credit money which is not fiat money, such as United States paper currency during periods prior to 1862, before the first United States Notes were created and declared by the government to be legal tender.

Criticism

Fiat currency was viewed as a curse by American President Andrew Jackson. Jackson went so far as to pass the Specie Circular in 1836, which required all payment for government lands to be in gold or silver coin. The Austrian School of Economics has long held that no sound economy can long endure under fiat money, with prominent Austrian Economist Ludwig von Mises arguing in his book Human Action that, “What is needed for a sound expansion of production is additional capital goods, not money or fiduciary media. The credit boom is built on the sands of banknotes and deposits. It must collapse.”

Alan Greenspan, Federal Reserve Chairman from 1987 to 2006, was an early critic of fiat money arguing in his essay, Gold and Economic Freedom, that,

This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.

Fiat currency has also been criticized by some, such as G. Edward Griffin, Congressman Ron Paul, and Peter Schiff, the president of Euro-Pacific Capital Inc., for increasing the number and severity of boom-bust economic cycles, causing inflation, and allowing nations to initiate or prolong war.

Among many people who advocate for specie, such as gold, silver or a bimetallic standard, the term fiat money is often used as a pejorative term.