[Woolygimp]

The dollar is considered a hard currency because a hard currency refers to a currency in which investors have confidence, such as that of a politically stable country with low inflation and consistent monetary and fiscal policies.

If Ron Paul were elected the latter part of that statement, "consistent monetary and fiscal policies" would go flying out the window and there could possibly be a disaster waiting to happen.

However, people who declare the USD a fiat currency do not take into account that a dollar can be returned to the issuing bank in exchange for a dollar’s worth of the bank’s assets.