Debasement refers to the reduction in money’s value or purchasing power over time, often due to an increase in the money supply or dilution of its intrinsic value.

How It Happens

1. Historical Context (Physical Currency):

   • In the past, debasement involved physically reducing the precious metal content of coins. For example:
     • A gold or silver coin might have a portion of its metal shaved off, replaced with a cheaper alloy, or re-minted with less valuable materials.
     • The coin would look the same but have less intrinsic value.

2. Modern Context (Fiat Currency):