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| Money is expressed in four ways, 1. commodity money - actuall trading of a commodity. Gold or silver coins qualify, along with any type of barter item. 2. Convertible money - certificates that are redeemable for a specific commodity of specific qty. This was developed so we didn't have to lug around heavy commodities to trade. 3. Fractional money - like convertible money exempt that there are more certificates outstanding than commodities available for exchange, like our dollar prior to 1971. Actually for USA citizens, the convertibility ended before that but that's a different story. 4. Fiat, which is money backed by nothing, which is what we have today. The thing holding the dollar together is the fact that it has incumbency as the worlds reserve currency. A majority of world trade settlements happen in US dollars. This allows us the ability to have the fed reserve create money, loan it to the government, have the government use it to control the populace with payroll,programs, and handouts, have it circulated in our economy, and eventually, the fiat dollar is exported in exchange for things that we consume and it never comes back home. The overseas demand for our dollar allows this cycle to continue even though all other fundamental indicators and policies of the last 30 years would support a weakening dollar and higher inflation within the USA. | |
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What is Money?
