A Client Glossary: The Language of Our Commentaries

This glossary defines the terms used in Keaney Financial Services Corp commentaries and meeting reviews. Each entry is a definition followed by the sources the author cited for it. Nothing in this material is investment advice or a portfolio action. Models diagnose. Advisors decide. Portfolios implement.

Central Banks

Central banks are public institutions that manage the currency and monetary policies of a particular country (setting interest rates). It is not a bank for individuals, meaning you can’t open a bank account or take out a loan from them. Colloquially known as the “bank of banks,” it serves as a regulator of commercial banking, which aims to support employment, control inflation, and promote economic stability through retail banks. (Retail banks are the banks that individuals have access to; Bank of America, Chase, Wells Fargo, etc.) There are approximately 222 central banks operating throughout the world, with 63 of them exercising the majority of global influence. The U.S. Federal Reserve Bank holds the top spot, followed by the European Central Bank (main banking authority through all European member countries), Bank of Japan and People’s Bank of China. ^[1][2]

Monetary policy

These are the rules or the regulatory framework that central banks use to manage a country’s economy through changes in interest rates and expanding the money supply (also known as printing money). This money creation is not physical, meaning utilizing a printer, paper or ink, but rather a digital creation of money by adding numbers or digits to their digital account on a computer; in other words “cash out of thin air”. ^[3]

Fiat Currency (paper money)

This is government-issued money. It is not backed by a real or physical asset (such as gold & silver in the past); this is also known as having “no intrinsic value”. The word “fiat” derives from the Latin expression: “let it be done”, and the paper only becomes money through a government decree that forces upon its constituents widespread acceptance. Other common descriptions are: “a note” and/or a “promise of value”. ^[4]

Treasuries

Debt obligation instruments (loans) that a government issues to finance its operations and pay off public debt. They’re backed by the full faith and credit (promise) of the issuer, the United States Treasury, for example, and are considered the safest investment. Buyers of these instruments are the U.S. Federal Reserve and other central banks, individual investors and institutions such as pension funds and mutual funds. In essence, the buyers of Treasuries receive a dividend (or interest payment) in exchange for loaning the government a lump sum. The interest rate varies based on maturity (term), and under normal economic conditions, the shorter the maturity, the lower the rate. ^[5]

Reserve Currency

A reserve currency is a foreign currency that central banks (and government Treasury Departments) hold in large quantities at all times, with the purpose of supporting trade, helping service debt (interest payment on bonds), and stabilizing their own economies. The reserve currency must be a highly trusted and liquid currency worldwide to serve as a primary form of global financial transactions and investment. The U.S. Dollar has been the primary reserve currency post-World War II (meaning it’s the largest held by Central Banks), but other currencies that also serve as reserves are: Euro (EUR), Japanese Yen (JPY), British Pound Sterling (BPS), Swiss Franc (CHF), and the Chinese Renminbi (RMB). Together they’re part of a “stockpile” of currencies. When a country’s currency serves as the primary global reserve currency, it can exercise great economic power, such as financial influence and low-interest borrowing costs. Gold, although not a fiat currency like the others, has long been held as part of the reserve “Stockpile”, but in 2025 it re-emerged as a major reserve for central banks (27%), surpassing U.S. Treasury holdings (22%). ^[6][7][8]

Currency devaluation

A deliberate policy by governments or central banks to lower the exchange rate (value) of their currency against other foreign currencies, making their exports more competitive (cheaper) in global markets and therefore making imports more expensive. It’s designed to help correct trade imbalances. Examples of countries that devalued their currencies have been: Russia (2009), Japan (2010), China (2015), Switzerland (2015), Turkey (2018), Vietnam (2022), Iran (2023), Argentina (2023), Egypt (2024), Bolivia (2026). ^[9][10]

Currency debasement

Refers to a currency’s loss of purchasing power over time from increasing the money supply to levels that surpass domestic economic output (more supply than growth/production). Unlike devaluation, debasement is not a deliberate policy but rather the result or consequence of policymaking and economic conditions or “printing too much money”. This results in the “dilution” of money. The U.S. has two recent examples of currency debasement. First in 1965 when the Treasury removed silver from dimes and quarters (replacing monetary metal with non-monetary metal, therefore diluting value), and in 1971 when President Nixon delinked the U.S. Dollar from Gold backing. Per Moneywise, as of 2023 the U.S. Dollar had lost 98% of its purchasing power since 1971. ^[11][12][13]

Monetary metal

A monetary metal is considered synonymous with money. It is a metal that actively functions as money or backs a currency or is widely recognized as a store of value (typically gold and silver). In some states, gold and silver are legal tender (meaning you can use them as a form of payment for specific transactions). Not all precious metals are considered monetary metals. The use of metal as money can be traced back to over 2,000 years BC, to early civilizations like Babylon, although coinage (the process of putting a stamp or design on the metal to certify its weight and purity) started much later. From the 1930s up until the 1970s, gold was the underlying asset backing the U.S. Dollar, meaning a country could turn their reserve dollars in exchange for the physical gold equivalent. But to provide the liquidity to other countries that were utilizing the U.S. Dollar to rebuild after WWII and for our own domestic expenses (such as industrial growth, welfare programs, military capabilities and so forth), the U.S. significantly increased the money supply above the amount of official gold backing. In fact, “by the end of WWII the U.S. had 75% of the world’s monetary gold and the dollar was the only currency still backed by gold.” When countries discovered this trend, they grew increasingly worried that the U.S. Dollar was worth less than the government portrayed on its balance sheets. Countries began demanding redemption (or convertibility) of dollars for gold. In 1971, President Richard Nixon suspended the convertibility of dollars for gold, officially adopting an unbacked fiat system only. ^[14][15][16]

Industrial metal

It’s a metal that is more abundant than a monetary metal and functions as raw material for the global economy, and its demand is dependent on industrial uses and manufacturing sectors such as automobiles and infrastructure projects. Examples are copper, steel, aluminum, etc. Silver is unique, because while it has historical significance as a monetary metal, over 60% of its demand comes from industrial use. ^[17]

Paper gold vs physical gold

“Paper gold” is an indirect investment in gold; it’s a financial instrument, such as a mutual fund or ETF, that involves buying and selling contracts designed to track the price of physical gold (giving investors exposure to the metal) without requiring the actual purchase of the physical metal. The most popular example of this is SPDR Gold Shares (NYSE: GLD). Physical gold, such as bullion bars and coins, represents true price and ownership of gold, and the supply of the tangible metal is much more limited than the “paper gold”. While both forms can be useful for investors, “paper gold is subject to more market manipulation as ‘whales’ have the power to drive up prices or cause a widespread selloff to improve their standing”. ^[18]

Government budget deficit vs. national debt

The government deficit is the shortfall between the money the government brings in (through revenues, primarily taxes) and what they spend (such as government payroll and welfare programs) during a fiscal year. As of 2026, the deficit projection is -$1.8 trillion, which is the net result of $5.2 trillion in revenues minus $7 trillion in spending. The national debt on the other hand, is the net accumulated amount of money the government owes over its entire history. As of February 2026, the national debt sits at around $39.2 trillion. ^[19][20]

Sources

This glossary was prepared on 07/07/2026. Definitions and figures reflect the third-party sources cited below, as of the dates each source reports.

Any forward-looking figures or outlooks referenced are produced by third-party data providers, official bodies, and news organizations and are subject to revision by those sources. Keaney Financial Services Corp does not originate forecasts. The firm’s role is analysis and contextualization of third-party data.

Numbered by first appearance in the body and matched to the red superscript citations above. Citations are listed as the author provided them.

[1] What is a central bank? Cited for: the definition of a central bank and its role in setting interest rates and regulating commercial banking.

[2] BIS member central banks. Cited for: the count of approximately 222 central banks worldwide, with 63 BIS member central banks exercising the majority of global influence.

[3] FRB: Is the Federal Reserve printing money in order to buy Treasury securities? Cited for: the description of money creation as digital rather than physical printing.

[4] Fiat Money Explained: Benefits, Risks, and Global Examples. Cited for: the definition of fiat currency, the Latin origin of the word, and the “no intrinsic value” description.

[5] Understanding Treasury Securities: Bills, Bonds, and Notes. Cited for: the definition of Treasuries, their buyers, and the relationship between maturity and interest rate.

[6] Understanding Currency Reserves: Overview and Key Examples. Cited for: the definition of a reserve currency and the list of currencies held as reserves.

[7] The U.S. Dollar as the World’s Dominant Reserve Currency | Congress.gov | Library of Congress. Cited for: the role of the U.S. Dollar as the primary reserve currency since World War II.

[8] The Move Into Gold by Other Nations Has Happened Before. It’s Bad News for the U.S. Dollar. - Barron’s. Cited for: gold at 27% of central-bank reserves surpassing U.S. Treasury holdings at 22% in 2025.

[9] Understanding Currency Devaluation: Effects on Trade and Economy. Cited for: the definition of devaluation, its trade effects, and the country examples listed.

[10] Bolivia Dollar Peg Ends in 30% Devaluation, IMF Talks. Cited for: the Bolivia (2026) example.

[11] Understanding Currency Debasement: Definition and Historical Examples. Cited for: the definition of debasement and its distinction from devaluation.

[12] Devaluation of the Dollar | History | Research Starters | EBSCO Research. Cited for: the 1965 coinage change and the 1971 end of gold convertibility as U.S. examples.

[13] US Dollar Value Is Plummeting - What Does This Mean for You? Cited for: the Moneywise statement that as of 2023 the U.S. Dollar had lost 98% of its purchasing power since 1971.

[14] Money | Definition, Economics, History, Types, & Facts - Coins, Currency, Minting | Britannica Money. Cited for: the early history of metal as money and the origin of coinage.

[15] Understanding Monetary Reserves: Definition, Function, and History. Cited for: the definition of a monetary metal and the legal-tender status of gold and silver in some states.

[16] Understanding the Gold Standard: History, Collapse, and Impact on the U.S. Dollar. Cited for: the gold backing of the U.S. Dollar from the 1930s to the 1970s, the quoted statement on WWII-era gold holdings, and the 1971 suspension of convertibility.

[17] Understanding the Metals Market for NASDAQ:META by GlobalWolfStreet - TradingView. Cited for: the definition of industrial metals and the majority-industrial demand for silver.

[18] Paper Gold vs Physical Gold: Key Differences You Should Know Before Investing | Scottsdale Bullion & Coin. Cited for: the paper-versus-physical distinction, the SPDR Gold Shares example, and the quoted statement on market manipulation.

[19] Debt versus Deficit What’s the Difference? - TreasuryDirect. Cited for: the definitions of the deficit and the national debt, the note on future liabilities, and the national-debt level as of February 2026.

[20] The Budget and Economic Outlook: 2026 to 2036 | Congressional Budget Office. Cited for: the fiscal year 2026 deficit projection of -$1.8 trillion and the underlying revenue and spending figures.

1. Compliance Disclosures and Risk Warnings

This glossary is published by Keaney Financial Services Corp for educational and informational purposes only. It is a glossary of terms used in the firm’s commentaries and meeting reviews. It is not investment advice, a recommendation to buy or sell any security, an offer or solicitation, or a guarantee of any outcome. Past performance is not indicative of future results and does not guarantee future returns. All investments involve risk, including the possible loss of principal. Markets can be volatile and values can fluctuate due to economic, geopolitical, regulatory, and other factors. Readers should consult their own financial, legal, and tax advisors before making investment decisions. Keaney Financial Services Corp and its representatives do not guarantee the accuracy or completeness of any third-party data referenced herein.

2. Framework and Risk Management Disclosure

The KFSC Institutional Intelligence System, including its KFSC Macro Regime Model and four diagnostic frameworks (the Monetary Integrity Framework, the Liquidity Transmission Framework, the Strategic Scarcity Framework, and the Market Structure Framework), provides analytical tools used to support advisor decision-making. These tools are not automated systems, do not predict future market outcomes, and do not dictate trades or portfolio actions. All portfolio decisions are made at the sole discretion of the advisor based on their interpretation of available data, client objectives, and prevailing market conditions. Investing involves risk, including political and geopolitical instability, economic and monetary system changes, currency fluctuations, market liquidity conditions, and rapid price volatility. Asset allocation, diversification, and risk management strategies are designed to manage risk but do not guarantee profits or protect against losses.

3. Forward-Looking Statements Disclosure

This glossary contains definitions and historical context written in clear, everyday language for a general reader. These statements are based on current observations, publicly-reported information, and analytical interpretation. There is no assurance current conditions will continue or follow any particular path. Keaney Financial Services Corp does not produce forecasts. Where this glossary references forward-looking expectations, those references are interpretive context drawn from publicly-reported third-party sources. Forecasting future market data is not part of the firm’s analytical methodology.

4. Securities, Examples, and Index Disclosure

References to specific securities, funds, companies, and institutions in this glossary, including SPDR Gold Shares (GLD) and the retail banks named as examples, are illustrations of market structure and terminology only. They are not recommendations, and KFSC Risk Managed Strategies may or may not hold any security mentioned. Gold and other precious metals involve special risks, including price volatility and the absence of interest or dividend income. Indexes and exchange rates are unmanaged and are not available for direct investment.

5. Methodology and Data Disclosure

Definitions and figures in this glossary are drawn from the third-party sources identified in the Sources section and are quoted as those sources report them; Keaney Financial Services Corp has not independently recalculated them. Keaney Financial Services Corp does not originate underlying market data and contextualizes third-party data within the KFSC Macro Regime Model. All data is believed to be reliable but is not guaranteed and may be revised, restated, delayed, or estimated. Produced by Keaney Financial Services Corp. Prepared July 7, 2026.

6. Historical Event Selection and Dataset Disclosure

The historical events, dates, and country examples shown were selected to illustrate the terms defined. They are descriptive context, not discrete events selected for backtesting or trend extrapolation. Past patterns are not a reliable predictor of future patterns. All figures are as of the dates and reference periods specified and are subject to revision as new information becomes available.

7. Statistical Interpretation and Non-Predictive Use Disclosure

All figures presented, including reserve-holding percentages, purchasing-power estimates, and deficit and debt totals, are drawn directly from the data identified in the Sources and are provided for descriptive and contextual purposes only. These measures do not represent expected outcomes, do not imply probability of recurrence, and do not constitute forecasts or projections. Keaney Financial Services Corp does not claim that any condition described will continue, reverse, strengthen, or weaken. All forward-looking interpretations remain subject to uncertainty and advisor discretion.

8. Advisor Discretion Statement

All investment decisions are advisor-led and implemented through the applicable KFSC Risk Managed Strategy risk option. Clients select a risk option before investing, and asset amounts are determined at the strategy/model level. Advisors may review whether a client’s selected risk option remains appropriate based on risk tolerance, objectives, time horizon, liquidity needs, and changes in financial circumstances. Models diagnose. Advisors decide. Portfolios implement.

9. Business Entity Disclosure

Keaney Financial Services Corp. provides insurance and financial services. Ameritas Investment Company, LLC (AIC), Member FINRA / SIPC, provides securities and investments. Ameritas Advisory Services, LLC (AAS) provides investment advisory services. AIC and AAS are not affiliated with Keaney Financial Services Corp. Ernesto Keaney and Emmelis Keaney are Investment Adviser Representatives of Ameritas Advisory Services, LLC. Accounts are managed on the Ameritas Wealth Platform.