Introduction
How
important is money to most people? It is clearly a basic requirement for life
and most people spend the majority of their lives working to acquire it. So,
what do you know about money itself? Do you know the answers to these
questions?
(1) What
is money?
(2) Where
does it come from?
(3) Who
makes it?
Wouldn’t
you think that people who spend so much time and effort trying to acquire money
would make it their business to know as much as possible about money? How many
courses about money did you take in high school and college? Doesn’t that seem
strange?
The
reason the masses aren’t taught about money and the banking system is probably
because those who control the banking and monetary systems do not want them to
know what they have done in the past and what they are doing now. We are about
to change things and let the genie out of the box.
What is money?
The
answer we are going to give for this question is for what money was before the
1970s. There have been significant changes since then.
(1) commodity money – A commodity is something
useful or valued.[i]
It is something that can be traded for something else. In the history of
mankind, a wide range of commodities have served as money: salt,
hides, cattle, slaves, tobacco, sugar, metals, silver, and gold, to name a few.
At any moment in time, there are likely to be several commodities that strive
for the position of being the universal standard for pricing (dollars, ounces
of gold, number of cows, etc.).[ii]
(2) fiat money -- Fiat money replaces
commodity money with valueless and
inconvertible symbols issued by the state. It ultimately rests on social
trust in the ability of the state to enforce payments in this form of money; it
competes with commodity money and restricts the presence of the latter in the
sphere of exchange; it also provides a standard unit of account for prices.
Fiat money can take several forms varying from cheap metallic coin, to crude
paper monies with forced circulation, to sophisticated legal tender issued by
central banks and backed by state debt.[iii]
(3) credit money -- Credit money is
a privately issued form of money that results from credit relations among
agents of circulation. It is inherently a promise to pay in the future, a
liability of the issuer. Credit money is normally created as financial
institutions issue liabilities to finance the loans they make. By the same
token, credit money returns to its issuer as loans mature (liabilities drain
away). Final settlement requires either cancellation against another promise to
pay, or the intervention of commodity or fiat money. [iv]
So,
money can be a commodity, something that is valueless issued by the state, or a
promise to pay something in the future. This is probably not the definition you
had in mind a few seconds ago. The
acceptance of fiat or credit money ultimately rests on social trust in the ability of the state to enforce payments
in that form of money.[v]
If a society does not have that trust, it will turn to commodity money instead.
The bottom line is that the whole USA monetary systems ultimately exists because of one thing -- TRUST! The government's -- and the 1%'s -- greatest fear is that people will stop trusting the system.
Cogitate on that for awhile!
The Country Cogitator
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