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What is money?
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The US twenty-dollar bill
For other uses, see Money (disambiguation).
Money is anything that is generally accepted as payment for goods and services and
repayment of debts.[1][2] The main functions of money are distinguished as: a medium of
exchange, a unit of account, a store of value, and occasionally, a standard of deferred
payment.[3][4]
Money originated as commodity money, but nearly all contemporary money systems are
based on fiat money.[3] Fiat money is without value as a physical commodity, and derives
its value by being declared by a government to be legal tender; that is, it must be accepted
as a form of payment within the boundaries of the country, for "all debts, public and
private".
The money supply of a country consists of currency (banknotes and coins) and demand
deposits or 'bank money' (the balance held in checking accounts and savings accounts).
These demand deposits usually account for a much larger part of the money supply than
currency.[5][6] Bank money is intangible and exists only in the form of various bank
records. Despite being intangible, bank money still performs the basic functions of
money, being generally accepted as a form of payment.[7]
History of money
A 640 BCE one-third stater electrum coin from Lydia.
Main article: History of money
The use of barter-like methods may date back to at least 100,000 years ago, though there
is no evidence of a society or economy that relied primarily on barter.[8] Instead, non-
monetary societies operated largely along the principles of gift economics. When barter
did occur, it was usually between either complete strangers or potential enemies.[9]
Many cultures around the world eventually developed the use of commodity money. The
shekel was originally both a unit of currency and a unit of weight.[10]. The first usage of
the term came from Mesopotamia circa 3000 BC. Societies in the Americas, Asia, Africa
and Australia used shell money – usually, the shell of the money cowry (Cypraea
moneta) were used. According to Herodotus, and most modern scholars, the Lydians
were the first people to introduce the use of gold and silver coin.[11] It is thought that
these first stamped coins were minted around 650–600 BC.[12]
The system of commodity money eventually evolved into a system of representative
money.[citation needed] This occurred because gold and silver merchants or banks would issue
receipts to their depositors – redeemable for the commodity money deposited.
Eventually, these receipts became generally accepted as a means of payment and were
used as money. Paper money or banknotes were first used in China during the Song
Dynasty. These banknotes, known as "jiaozi" evolved from promissory notes that had
been used since the 7th century. However, they did not displace commodity money, and
were used alongside coins. Banknotes were first issued in Europe by Stockholms Banco
in 1661, and were again also used alongside coins. The gold standard, a monetary system
where the medium of exchange are paper notes that are convertible into pre-set, fixed
quantities of gold, replaced the use of gold coins as currency in the 17th-19th centuries in
Europe. These gold standard notes were made legal tender, and redemption into gold
coins was discouraged. By the beginning of the 20th century almost all countries had
adopted the gold standard, backing their legal tender notes with fixed amounts of gold.
After World War II, at the Bretton Woods Conference, most countries adopted fiat
currencies that were fixed to the US dollar. The US dollar was in turn fixed to gold. In
1971 the US government suspended the convertibility of the US dollar to gold. After this
many countries de-pegged their currencies from the US dollar, and most of the world's
currencies became unbacked by anything except the governments' fiat of legal tender.
Etymology
The word "money" is believed to originate from a temple of Hera, located on Capitoline,
one of Rome's seven hills. In the ancient world Hera was often associated with money.
The temple of Juno Moneta at Rome was the place where the mint of Ancient Rome was
located.[13] The name "Juno" may derive from the Etruscan goddess Uni (which means
"the one", "unique", "unit", "union", "united") and "Moneta" either from the Latin word
"monere" (remind, warn, or instruct) or the Greek word "moneres" (alone, unique).
In the Western world, a prevalent term for coin-money has been specie, stemming from
Latin in specie, meaning 'in kind'.[14]
Functions
In the past, money was generally considered to have the following four main functions,
which are summed up in a rhyme found in older economics textbooks: "Money is a
matter of functions four, a medium, a measure, a standard, a store." That is, money
functions as a medium of exchange, a unit of account, a standard of deferred payment,
and a store of value.[4] However, most modern textbooks now list only three functions,
that of medium of exchange, unit of account, and store of value, not considering a
standard of deferred payment as a distinguished function, but rather subsuming it in the
others.[3][15][16]
There have been many historical disputes regarding the combination of money's
functions, some arguing that they need more separation and that a single unit is
insufficient to deal with them all. One of these arguments is that the role of money as a
medium of exchange is in conflict with its role as a store of value: its role as a store of
value requires holding it without spending, whereas its role as a medium of exchange
requires it to circulate.[4] Others argue that storing of value is just deferral of the
exchange, but does not diminish the fact that money is a medium of exchange that can be
transported both across space and time.[17] The term 'financial capital' is a more general
and inclusive term for all liquid instruments, whether or not they are a uniformly
recognized tender.
Medium of exchange
Main article: Medium of exchange
When money is used to intermediate the exchange of goods and services, it is performing
a function as a medium of exchange. It thereby avoids the inefficiencies of a barter
system, such as the 'double coincidence of wants' problem.
Unit of account
Main article: Unit of account
A unit of account is a standard numerical unit of measurement of the market value of
goods, services, and other transactions. Also known as a "measure" or "standard" of
relative worth and deferred payment, a unit of account is a necessary prerequisite for the
formulation of commercial agreements that involve debt. To function as a 'unit of
account', whatever is being used as money must be:
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Divisible into smaller units without loss of value; precious metals can be coined
from bars, or melted down into bars again.
Fungible: that is, one unit or piece must be perceived as equivalent to any other,
which is why diamonds, works of art or real estate are not suitable as money.
A specific weight, or measure, or size to be verifiably countable. For instance,
coins are often made with ridges around the edges, so that any removal of
material from the coin (lowering its commodity value) will be easy to detect.
Store of value
Main article: Store of value
To act as a store of value, a money must be able to be reliably saved, stored, and retrieved
– and be predictably usable as a medium of exchange when it is retrieved. The value of
the money must also remain stable over time. In that sense, inflation by reducing the
value of money, diminishes the ability of the money to function as a store of value.[3]
Standard of deferred payment
Main article: Standard of deferred payment
While standard of deferred payment is distinguished by some texts,[4] particularly older
ones, other texts subsume this under other functions.[3][15][16] A "standard of deferred
payment" is an accepted way to settle a debt – a unit in which debts are denominated, and
the status of money as legal tender, in those jurisdictions which have this concept, states
that it may function for the discharge of debts. When debts are denominated in money,
the real value of debts may change due to inflation and deflation, and for sovereign and
international debts via debasement and devaluation.
Money supply
Main article: Money supply
In economics, money is a broad term that refers to any financial instrument that can fulfill
the functions of money (detailed above). These financial instruments together are
collectively referred to as the money supply of an economy. Since the money supply
consists of various financial instruments (usually currency, demand deposits and various
other types of deposits), the amount of money in an economy is measured by adding
together these financial instruments creating a monetary aggregate. Modern monetary
theory distinguishes among different types of monetary aggregates, using a categorization
system that focuses on the liquidity of the financial instrument used as money.
Market liquidity
Main article: Market liquidity
Market liquidity describes how easily an item can be traded for another item, or into the
common currency within an economy. Money is the most liquid asset because it is
universally recognised and accepted as the common currency. In this way, money gives
consumers the freedom to trade goods and services easily without having to barter.
Liquid financial instruments are easily tradable and have low transaction costs. There
should be no (or minimal) spread between the prices to buy and sell the instrument being
used as money.
Measures of money
The money supply is the amount of financial instruments within a specific economy
available for purchasing goods or services. The money supply is usually measured as
three escalating categories M1, M2 and M3. The categories grow in size with M1 being
currency (coins and bills) and checking account deposits. M2 is currency, checking
account deposits and savings account deposits, and M3 is M2 plus time deposits. M1
includes only the most liquid financial instruments, and M3 relatively illiquid
instruments.
Another measure of money, M0, is also used, although unlike the other measures, it does
not represent actual purchasing power by firms and households in the economy. M0 is
base money, or the amount of money actually issued by the central bank of a country. It
is measured as currency plus deposits of banks and other institutions at the central bank.
M0 is also the only money that can satisfy the reserve requirements of commercial banks.
Types of money
Money is an abstraction, idea or concept, token instances of which are the physical bills
or coins which are carried and traded. Currently, most modern monetary systems are
based on fiat money. However, for most of history, almost all money was commodity
money, such as gold and silver coins. As economies developed, commodity money was
eventually replaced by representative money, such as the gold standard, as traders found
the physical transportation of gold and silver burdensome. Fiat currencies gradually took
over in the last hundred years, especially since the breakup of the Bretton Woods system
in the early 1970s.
Commodity money
Main article: Commodity money
Many items have been used as commodity money such as naturally scarce precious
metals, conch shells, barley, beads etc., as well as many other things that are thought of
as having value. Commodity money value comes from the commodity out of which it is
made. The commodity itself constitutes the money, and the money is the commodity.[18]
Examples of commodities that have been used as mediums of exchange include gold,
silver, copper, rice, salt, peppercorns, large stones, decorated belts, shells, alcohol,
cigarettes, cannabis, candy, etc. These items were sometimes used in a metric of
perceived value in conjunction to one another, in various commodity valuation or Price
System economies. Use of commodity money is similar to barter, but a commodity
money provides a simple and automatic unit of account for the commodity which is being
used as money. Although some gold coins such as the Krugerrand are considered legal
tender, there is no record of their face value on either side of the coin. The rationale for
this is that emphasis is laid on their direct link to the prevailing value of their fine gold
content.[19] American Eagles are imprinted with their gold content and legal tender face
value.[20]
Representative money
Main article: Representative money
In 1875 economist William Stanley Jevons described what he called "representative
money," i.e., money that consists of token coins, or other physical tokens such as
certificates, that can be reliably exchanged for a fixed quantity of a commodity such as
gold or silver. The value of representative money stands in direct and fixed relation to the
commodity that backs it, while not itself being composed of that commodity.[21]
Fiat money
Main article: Fiat money
Fiat money or fiat currency is money whose value is not derived from any intrinsic value
or guarantee that it can be converted into a valuable commodity (such as gold). Instead, it
has value only by government order (fiat). Usually, the government declares the fiat
currency (typically notes and coins from a central bank, such as the Federal Reserve
System in the U.S.) to be legal tender, making it unlawful to not accept the fiat currency
as a means of repayment for all debts, public and private.[22][23]
Some bullion coins such as the Australian Gold Nugget and American Eagle are legal
tender, however, they trade based on the market price of the metal content as a
commodity, rather than their legal tender face value (which is usually only a small
fraction of their bullion value).[20][24]
Fiat money, if physically represented in the form of currency (paper or coins) can be
accidentally damaged or destroyed. However, fiat money has an advantage over
representative or commodity money, in that the same laws that created the money can
also define rules for its replacement in case of damage or destruction. For example, the
U.S. government will replace mutilated Federal Reserve notes (U.S. fiat money) if at
least half of the physical note can be reconstructed, or if it can be otherwise proven to
have been destroyed.[25] By contrast, commodity money which has been lost or destroyed
cannot be recovered.
Commercial bank money
Main article: Demand deposit
Commercial bank money or demand deposits are claims against financial institutions that
can be used for the purchase of goods and services. A demand deposit account is an
account from which funds can be withdrawn at any time by check or cash withdrawal
without giving the bank or financial institution any prior notice. Banks have the legal
obligation to return funds held in demand deposits immediately upon demand (or 'at
call'). Demand deposit withdrawals can be performed in person, via checks or bank
drafts, using automatic teller machines (ATMs), or through online banking.[26]
Commercial bank money is created through fractional-reserve banking, the banking
practice where banks keep only a fraction of their deposits in reserve (as cash and other
highly liquid assets) and lend out the remainder, while maintaining the simultaneous
obligation to redeem all these deposits upon demand.[27][28] Commercial bank money
differs from commodity and fiat money in two ways, firstly it is non-physical, as its
existence is only reflected in the account ledges of banks and other financial institutions,
and secondly, there is some element of risk that the claim will not be fulfilled if the
financial institution becomes insolvent. The process of fractional-reserve banking has a
cumulative effect of money creation by commercial banks, as it expands money supply
(cash and demand deposits) beyond what it would otherwise be. Because of the
prevalence of fractional reserve banking, the broad money supply of most countries is a
multiple larger than the amount of base money created by the country's central bank. That
multiple (called the money multiplier) is determined by the reserve requirement or other
financial ratio requirements imposed by financial regulators.
The money supply of a country is usually held to be the total amount of currency in
circulation plus the total amount of checking and savings deposits in the commercial
banks in the country.
Monetary policy
Main article: Monetary policy
When gold and silver are used as money, the money supply can grow only if the supply
of these metals is increased by mining. This rate of increase will accelerate during
periods of gold rushes and discoveries, such as when Columbus discovered the new
world and brought back gold and silver to Spain, or when gold was discovered in
California in 1848. This causes inflation, as the value of gold goes down. However, if the
rate of gold mining cannot keep up with the growth of the economy, gold becomes
relatively more valuable, and prices (denominated in gold) will drop, causing deflation.
Deflation was the more typical situation for over a century when gold and paper money
backed by gold were used as money in the 18th and 19th centuries.
Modern day monetary systems are based on fiat money and are no longer tied to the value
of gold. The control of the amount of money in the economy is known as monetary
policy. Monetary policy is the process by which a government, central bank, or monetary
authority manages the money supply to achieve specific goals. Usually the goal of
monetary policy is to accommodate economic growth in an environment of stable prices.
For example, it is clearly stated in the Federal Reserve Act that the Board of Governors
and the Federal Open Market Committee should seek “to promote effectively the goals of
maximum employment, stable prices, and moderate long-term interest rates.”[29]
A failed monetary policy can have significant detrimental effects on an economy and the
society that depends on it. These include hyperinflation, stagflation, recession, high
unemployment, shortages of imported goods, inability to export goods, and even total
monetary collapse and the adoption of a much less efficient barter economy. This
happened in Russia, for instance, after the fall of the Soviet Union.
Governments and central banks have taken both regulatory and free market approaches to
monetary policy. Some of the tools used to control the money supply include:
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changing the interest rate at which the government loans or borrows money
currency purchases or sales
increasing or lowering government borrowing
increasing or lowering government spending
manipulation of exchange rates
raising or lowering bank reserve requirements
regulation or prohibition of private currencies
taxation or tax breaks on imports or exports of capital into a country
In the US, the Federal Reserve is responsible for controlling the money supply, while in
the Euro area the respective institution is the European Central Bank. Other central banks
with significant impact on global finances are the Bank of Japan, People's Bank of China
and the Bank of England.
For many years much of monetary policy was influenced by an economic theory known
as monetarism. Monetarism is an economic theory which argues that management of the
money supply should be the primary means of regulating economic activity. The stability
of the demand for money prior to the 1980s was a key finding of Milton Friedman and
Anna Schwartz[30] supported by the work of David Laidler,[31] and many others. The
nature of the demand for money changed during the 1980s owing to technical,
institutional, and legal factors and the influence of monetarism has since decreased.
See also
Money supply:

M0: In some countries, such as the United Kingdom, M0 includes bank reserves,
so M0 is referred to as the monetary base, or narrow money.[12]

MB: is referred to as the monetary base or total currency.[13] This is the base from
which other forms of money (like checking deposits, listed below) are created and
is traditionally the most liquid measure of the money supply. [14]

M1: Bank reserves are not included in M1.

M2: represents money and "close substitutes" for money.[15] M2 is a broader
classification of money than M1. Economists use M2 when looking to quantify
the amount of money in circulation and trying to explain different economic
monetary conditions. M2 is a key economic indicator used to forecast inflation.[16]

M3: Since 2006, M3 is no longer published or revealed to the public by the US
central bank.[17] However, there are still estimates produced by various private
institutions.

MZM: Money with zero maturity. It measures the supply of financial assets
redeemable at par on demand.
The ratio of a pair of these measures, most often M2/M0, is called an (actual, empirical)
money multiplier.
[edit] Fractional-reserve banking
Main article: Fractional-reserve banking
The different forms of money in government money supply statistics arise from the
practice of fractional-reserve banking. Whenever a bank gives out a loan in a fractionalreserve banking system, a new sum of money is created. This new type of money is what
makes up the non-M0 components in the M1-M3 statistics. In short, there are two types
of money in a fractional-reserve banking system[18][19]:
1. central bank money (physical currency, government money)
2. commercial bank money (money created through loans) - sometimes
referred to as private money, or checkbook money[20]
In the money supply statistics, central bank money is MB while the commercial bank
money is divided up into the M1-M3 components. Generally, the types of commercial
bank money that tend to be valued at lower amounts are classified in the narrow category
of M1 while the types of commercial bank money that tend to exist in larger amounts are
categorized in M2 and M3, with M3 having the largest.
Reserves are deposits that banks have received but have not loaned out. In the USA, the
Federal Reserve regulates the percentage that banks must keep in their reserves before
they can make new loans. This percentage is called the minimum reserve. This means
that if a person makes a deposit for $1000.00 and the bank reserve mandated by the FED
is 10% then the bank must increase its reserves by $100.00 and is able to loan the
remaining $900.00. The maximum amount of money the banking system can legally
generate with each dollar of reserves is called the (theoretical) money multiplier, and is
calculated as the reciprocal of the minimum reserve. For a reserve of 10% the money
multiplier, followed by the infinite geometric series formula, is the reciprocal of 10%,
which is 10.
[edit] Example
Note: The examples apply when read in sequential order.
M0
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
Laura has ten US $100 bills, representing $1000 in the M0 supply for the United
States. (MB = $1000, M0 = $1000, M1 = $1000, M2 = $1000)
Laura burns one of her $100 bills. The US M0, and her personal net worth, just
decreased by $100. (MB = $900, M0 = $900, M1 = $900, M2 = $900)
M1
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Laura takes the remaining nine bills and deposits them in her checking account at
her bank. (MB = $900, M0 = 0, M1 = $900, M2 = $900)
The bank then calculates its reserve using the minimum reserve percentage given
by the Fed and loans the extra money. If the minimum reserve is 10%, this means
$90 will remain in the bank's reserve. The remaining $810 can only be used by
the bank as credit, by lending money, but until that happens it will be part of the
banks excess reserves.
The M1 money supply increased by $810 when the loan is made. M1 money has
been created. ( MB = $900 M0 = 0, M1 = $1710, M2 = $1710)
Laura writes a check for $400, check number 7771. The total M1 money supply
didn't change, it includes the $400 check and the $500 left in her account. (MB =
$900, M0 = 0, M1 = $1710, M2 = $1710)
Laura's check number 7771 is accidentally destroyed in the laundry. M1 and her
checking account do not change, because the check is never cashed. (MB = $900,
M0 = 0, M1 = $1710, M2 = $1710)
Laura writes check number 7772 for $100 to her friend Alice, and Alice deposits
it into her checking account. M0 do not change, it still has $900 in it, Alice's $100
and Laura's $800. (MB = $900, M0 = 0, M1 = $1710, M2 = $1710)
The bank lends Mandy the $810 credit that it has created. Mandy deposits the
money in a checking account at another bank. The other bank must keep $81 as a
reserve and has $729 available for loans. This creates a promise-to-pay money
from a previous promise-to-pay, thus the M1 money supply is now inflated by
$729 (MB = $900, M0 = 0, M1 = $2439, M3 = $2439)
Mandy's bank now lends the money to someone else who deposits it on a
checking account on yet another bank, who again stores 10% as reserve and has
90% available for loans. This process repeats itself at the next bank and at the
next bank and so on, until the money in the reserves backs up an M1 money
supply of $9000, which is 10 times the M0 money. (MB = $900, M0 = 0, M1 =
$9000, M2 = $9000)
M2

Laura writes check number 7774 for $1000 and brings it to the bank to start a
Money Market account(that don't have a credit-creating charter)e M0 goes down
by $1000, but M2 stayed the same, because M2 includes the Money Market
account, but also everything in M1. (M0 = $4900, M1 = $6710, M2 = $6710)
Foreign Exchange

Laura writes check number 7776 for $200 and brings it downtown to a foreign
exchange bank teller at Credit Suisse to convert it to British Pounds. On this
particular day, the exchange rate is exactly USD $2.00 = GBP £1.00. The bank
Credit Suisse takes her $200 check, and gives her two £50 notes (and charges her
a dollar for the service fee). Meanwhile, at the Credit Suisse branch office in
Hong Kong, a customer named Huang has £100 and wants $200, and the bank
does that trade (charging him an extra £.50 for the service fee). US M0 still has
the $900, although Huang now has $200 of it. The £50 notes Laura walks off with
are part of Britain's M0 money supply that came from Huang.

The next day, Credit Suisse finds they have an excess of GB Pounds and a
shortage of US Dollars, determined by adding up all the branch offices' supplies.
They sell some of their GBP on the open FX market with Deutsche Bank, which
has the opposite problem. The exchange rate stays the same.

The day after, both Credit Suisse and Deutsche Bank find they have too many
GBP and not enough USD, along with other traders. To move their inventories,
they have to sell GBP at USD $1.999, that is, 1/10 cent less than $2 per pound,
and the exchange rate shifts. None of these banks has the power to increase or
decrease the British M0 or the American M0; they are independent systems.
Money can be described as a token which is used in our society to settle debts and to
pay for the services and commodities which are provided to us. In other words, money is
the medium of exchange in our society which has also been accepted by the law. There
are several types of money varying in liability and strength. The society has modified the
money at different types and in this way several types of money are introduced. When
there was ample availability of metals, metal money came into existence later it was
substituted by the paper money.
At different times, several commodities were used as the medium of exchange. So, it can
be said that according to the needs and availability of means, the types of money has
changed. Some of the major types of money are:
Commodity Money
Whenever any commodity is used for the exchange purpose, the commodity becomes
equivalent to the money and is called commodity money. There are certain types of
commodity, which are used as the commodity money. Among these, there are several
precious metals like gold, silver, copper and many more. Again, in many parts of the
world, seashells (also known as cowrie sells), tobacco and many other items were in use
as the mediums of exchange.
Fiat Money
The word fiat means the command of the sovereign. It is the type of money that is issued
by the command of the sovereign. The paper money is generally called as the fiat money.
This type of money forms a monetary standard. It has been made mandatory by law to
accept the fiat money, as an exchange medium, whenever it is offered to anyone.
Fiduciary Money
Today's monetary system is highly fiduciary. Whenever, any bank assures the customers
to pay in different type of money and when the customer can sell the promise or transfer
it to somebody else, it is called the fiduciary money. Fiduciary money is generally paid in
gold, silver or paper money. There are checks and bank notes, which are the examples of
fiduciary money because both are some kind of token which are used as money and
carries the same value.\
A little more on money… real money as enumerated in the U.S. Constitution:
THIS WAS OUR CURRENCY. Figure 1 is a picture of what certainly used to be
our currency, our current coin, before it was switched with Federal Reserve debt.
Below is ONE DOLLAR of silver.
Figure 1.
The coin pictured above is exactly what the U.S. Constitution mandates we
citizens of the United States of America use as money. The laws, and the code,
of the United States of America at that time sustained the circulation and use of
this piece and others like it as money. Does anyone bother to respect the
Constitution anymore? Our money was not debt. It was wealth. It was born of
nature and worked by the National mint into what it is. It was an asset which was
not simultaneously someone else's liability. Debt freedom, once achieved, was
much closer to absolute under such a money system. It bore no interest except
when its owner consented to lend it to a borrower for a rate of return. When it
was spent, it was considered at common law that a debt was paid. And it
respected the tradition from time immemorial that in exchange, value would be
exchanged for value; it was equitable. When it was saved, instead of spent, it
preserved the wealth of the saver, who could reasonably expect prices to be
within reasonable range of what they were when the coin was saved.
"As banker Vince Rossiter has pointed out, 'from 1814 to 1913, the
U.S. fought four wars, enjoyed greater increases in population than
any other nation in the world, suffered significant short-term
inflation and deflation at intervals, and still it was possible to buy
substantially the same basket of food in 1913 for approximately the
same price that it cost in 1814, 100 years earlier.' " (1.)
Try and do that now, with the base year of 1974, for example. You'll find it takes
multiples the money to buy the same item.
Our currency enjoyed the protection of the law and counterfeiters faced capital
punishment. Coin clipping, shaving, sweating, mixing with base metals, all being
ways in which kings and princes cheated the public, even our own government
was prohibited from such activities.
And Figure 2 is another picture of what used to be our currency, our current coin.
Below is one dollar of gold.
Figure 2.
Paper money was in use and that was acceptable as long at the paper promised
to pay gold or silver coin on demand. If the paper circulated, then the coin it
represented was on deposit; if the coin was circulating, then the paper was not
circulating. The silver and gold certificate was a token, but a lawful claim on the
real coin. See Figures 3 and 4.
Figure 3.
It is not easy to see but it reads, "This Certifies That There Has Been Deposited
In The Treasury Of The United States Of America Payable To The Bearer On
Demand One Silver Dollar." This was our money. And so was the following. It is
accurate enough to call this a "promise to pay" because it does indeed promise
to pay something, dollars in coin. It was an evidence of debt only in the sense
that the Treasury owed the bearer the specified coin, on demand. See Figure 3.
Figure 4.
Again, it is not easy to see but it reads, "This Certifies That There Has Been
Deposited In The Treasury Of The United States Of America Payable To The
Bearer On Demand Twenty Dollars In Gold Coin." This was our money. It is
indeed a promise to pay. Spending a silver or gold certificate was acceptable
because, although it was a money substitute, it was a reliable and dependable
proxy for coin. See Figure 4.
By law, the SUBSTANCE of OUR money was gold and silver bullion, and the
LAWS of money in the United States made gold and silver coin LAWFUL
MONEY.
Where do you find such specimens of money today? In coin shops and personal
collections.
What we had then (gold, silver coin) was replaced with what is today in your
pocket and your bank account. Today, we use THEIR money. You cannot tell me
that Federal Reserve Notes are our money. The Constitution does not
contemplate them. The First Money Act of April 2, 1792 does not contemplate
them. The code of the United States for most of our history does not contemplate
them. It is not our money. It doesn't matter that it has been around since
granddad was a young man. Crime has been around for a long time too. The
long lived perpetration of a wrong does not lend it legitimacy. It is alien to the
Constitution, and our money is effectively in exile. Their money resembles ours,
more or less, if you need glasses or don't read; there are pictures of our dead
Presidents on it. Many Americans simply believe it is our currency because that
is the way it has been since their birth, and they don't know what they are looking
at. Or they do and do not distinguish between real value and debt. We, including
those of us who know better, begrudgingly use it mainly because our own
government refuses to follow the Constitution on the money issue. And we must
use something so we use this. Our government has long since bought into
central banking with debt-based irredeemable paper. If you want to read why,
look up Alan Greenspan's essay, "Gold and Economic Freedom," which gives as
good an explanation as any: it is the easiest way to set up and maintain a
socialist welfare state.
There is no SUBSTANCE associated with their money. It may read X Dollars on
the face, but dollars of what? Above you saw a dollar of gold and a dollar of
silver. Above you saw gold and silver certificates that promised on demand to
pay a dollar of silver or ten dollars of gold. A Dollar was a unit of value that
related precious metal to a weight measured in grains.
"The central idea of the American money system is the 'dollar.'
What is a dollar? This question has been the subject of
volumes of discussion. The answer to the question has
become involved in a wilderness of theory---lost in a maze of
abstractions---as a result of which the reader is led to believe
that there is great difficulty in understanding just what a dollar
is. Fortunately, we do not have to read all this literature and
wrestle with all the hypothetical problems propounded. The
whole matter is settled by one section of the United States
statutes. The Act of February 12, 1873 (Sec. 14), establishes
"25.8 grains of gold" 900/1000 fine (or 23.22 grains of fine
gold), which bears the required stamp and impress. The
statute says that this is a dollar---not that it resembles a dollar,
or that, for the purposes of discussion, it may be considered a
dollar, but that it is a dollar. Furthermore, the statute again
cuts off all controversy regarding the worth of a dollar; for it
says that the dollar (the printed piece of gold containing 25.8
grains of gold 900/1000 fine) 'shall be the unit of value' in our
money system." (2.) This is our money.
But a Federal Reserve Note is not that which was just described; it doesn't even
come close. It is not a dollar. It is not any number of dollars. It is a mere slip of
paper signifying nothing more than a way by which to discharge your tax
liabilities, with the right to spend your surplus slips of paper on other things as if
they were lawful money of gold and silver. So the One Dollar Federal Reserve
Note, for example, is not one dollar, but claims to be on its face. Is that a lie? In
my world it is. Thou shall not bear false witness. Even if the Act of February 12,
1873 wasn't perfect, and needed revising or fine tuning, who can imagine how we
in this nation went from a dollar of the above description, to throwing it all out and
then adopting the current fiat paper dollar of no legal description other than the
vague, "it is an obligation of the United States," as the new central idea in the
American money system?
The Federal Reserve Note, which is their money is not even a promise to pay. It
makes no promise at all. Read any bill, you will not find any promise. What is in
your pocket or your bank account is debt. As a nation, we have borrowed our
own tax coupons and in commerce we accept and use them as if they were
money. You do not own your currency free and clear. Borrowed first by the
national government, it automatically arrives to the American people with interest
due. It is a fiduciary asset which is absolutely simultaneously someone else's
interest-bearing liability. It bears interest for the benefit of its issuer and creator,
the central banks and their stockholders, the instant it goes into circulation. The
central bank, which supplanted the existing system---which was unique and
American---was modeled after the Bank of England. "The Creature From Jekyll
Island," by E. G. Griffin, explains how that happened. Does that sound like our
system? Yet when you lend your own money today, as a private lender, you are
lending someone else's debt. And when you spend it, you are discharging your
immediate debt. When you accept it someone else's immediate debt to you is
discharged. But our collective perpetual debt remains. All debts become relative
with our government being a first-level debtor, and we citizens being secondlevel; third-level debtors depending on how our borrowing is structured. The
game we play is to cleverly move debts around until we have what we want and
hopefully don't find ourselves insolvent at some point. Even if you are technically
debt free, all mortgages paid off and car loans too, you are responsible, in the
eyes of the government, for your share of the national debt. Your debt freedom is
relative, not absolute. How do you know they won't come to you at any time to
call for the principal, or principal and remaining interest? Do you have that
guarantee? And being on the hook for a share of the national debt; and knowing
that your children will also be so burdened; and knowing that all the currency that
we use is borrowed, how could anyone refer to the currency we use today as our
currency?
You may not be directly paying interest on the national debt, but you are, now,
indirectly paying interest on our unpayable perpetual national debt to our
creditors by way of your taxes. And you will continue to pay, to an even greater
degree, to the one world government if and when it gets here. One final
observation about their money, it has the tendency to lose its purchasing power
relatively fast. Not as fast as some inflations, to be fair. However, nickel's worth
of American money in 1913 could buy approximately what a paper fiat dollar
buys today. And next year, the inflation calculators on the internet will have even
worse to report about the purchasing power of their money. Savers who save in
terms of their dollars lose more wealth over time. This loss of wealth to savers is
a continuation, as of 1913, of the tradition of coin clipping and shaving.
"....Henry VIII debased the coins. In those days they didn't have
computers, so the rascal prince simply shaved the coins when he
wanted to cheat the public. Nowadays we punch a few figures into
a giant computer at Culpepper, Virginia and create federal notes,
bills, and bonds, and float these out into the financial community so
reserves can follow a certain formula, and money can be created
via the creation of loans. When you create money this way you
inflate to the extent this money isn't answered by earned income.
This is our modern method of shaving coins." (3.)
It is difficult to imagine the level of intrigue that must have gone on as they, the
early central bankers, the financiers to the world, persuaded our government to
incrementally dismantle the Constitutional monetary system that was working as
it should have, and replace it with a system entirely based on debt.
What we have today (their money) is exactly what the Amero would be except it
would have different printing on the paper and it would be intended to circulate
among three nations, or substates, whereas the paper of the Federal Reserve
System is more or less designed for the United States. The printing, "The United
States of America," the portraits of the dead presidents, at worst makes
Mexicans and Canadians who handle US Dollars feel they are handling another
nation's or central bank's currency, and they are. Yet, changing the name to the
"Amero" and putting other faces than our dead presidents or, emulating the Euro,
no face at all on the bills would only allow our neighbors to believe the currency
is of their nation, or Union if that is what is coming. Nothing will have changed in
the nature of the money. It will still signify a debt to the central bank monopoly.
And, should such a Union succeed, you might imagine that it would be even
harder to repair the damage done and return to a Constitutional money system, if
such a thing were not already impossible.
In the final analysis, no one should be worried about our money being replaced
with the Amero, because (A) the coin money of the Constitution as already been
replaced and we have been using their irredeemable debt-based money for a
long, long time. We are using exactly the money that the bankers, not the
founding fathers, would have us use. The move from the above shown coin
money of the Constitution, to that of the Federal Reserve System was
unimaginably VAST in terms of its legal, financial, and sovereignty implications.
And (B) we are not really being threatened with a second replacement, but only a
cosmetic alteration to make it psychologically acceptable to this so-called
"Union."
To rephrase substantially the line in the National Register article that started all
this inquiry: The plan to replace gold and silver coin with central bank debt
was the necessary giant step closer to socialism's perverse dream of a
one-world government. Socialism is not new. It goes back to the mid 1800's.
They've had since their beginning, their agenda for the supremacy of the state
and the limitation of individual property rights and individual liberties. A
depreciated paper currency and State control of credit has always been part of
their agenda. It is pointless to be alarmed about the Amero today with no way to
go back to the gold and silver coin of the U.S. Constitution as the national
money. It is as insignificant as changing the designs that appear on our copper
quarters.
Jason Kirby
[email protected]
June 20, 2006
References:
1. Parity. ACRES, USA, by Charles Walters, Jr. Page 14.
2. Funds And Their Uses, by F. A. Cleveland, Ph.D., Wharton School of Finance
and Economy, University of Pennsylvania, D. Appleton and Co. Publishers, 1916.
3. Parity. ACRES, USA, by Charles Walters, Jr. page 16.
The Revolutionary War caused by Bankers?
A Moldy Crust Of Unprecedented
Arrogance, Treachery And Deceit!
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Posted by Richard Allan Jenni on March 5, 2010 at 5:30pm
Send Message View Richard Allan Jenni's blog
Unmitigated arrogance, especially combined with immense political power,
dwarfs all other revolting combinations of puffed-up self-importance- and Obama
has long crossed that disgusting threshold where the average American can
stand no more- at least without vomiting to relieve the unbearable pressure of
overwhelming nausea inexorably evoked by his vapid persona.
Barry reminds me of a wannabe concert violinist whose wealthy friends have
bought him a few minutes of fame at the conclusion of a magnificent
performance by one of the world’s great concert orchestras. He walks out on
stage to strut his stuff before a packed house- but the instant bow meets string,
hundreds gasp in horrified realization that their evening of musical excellence
has been ruined by an imposter. The reverent audience immediately becomes an
angry crowd. They rise as one body and boo. A spoiled tomato is hurled at the
stage by an old man who knew what was coming. As gifted musicians all run for
cover, our determined violinist holds his ground. Finally the great hall is quiet and
empty- save the solitary screeching of this inept violinist- a rotten tomato
splattered on his insolent brow…
We have seen such unbridled arrogance before. It started with the Currency Act
of 1764. Ben Franklin would later write, “The Colonies would gladly have borne
the little tax on tea and other matters had it not been the poverty caused by the
bad influence of the English bankers on the Parliament, which has caused in the
Colonies hatred of England and the Revolutionary War.”
And in fairness to King George, the sinister taproot of this arrogance was not the
English throne, but the bankers who controlled it.
In 1791 as the first Secretary of the Treasury, Alexander Hamilton was
instrumental in creating the First Bank of the United States, which had a 20 year
charter and was empowered to issue our paper money. Hamilton by his
treachery earned the contempt of Presidents Thomas Jefferson and James
Madison. Poetic justice that Jefferson’s vice-president Aaron Burr mortally
wounded Hamilton in a duel at Weehawken, New Jersey on 11 July 1804!
President Madison said, “History records that the money changers have used
every form of abuse, intrigue, deceit, and violent means possible to maintain their
control over governments by controlling the money and its issuance.”
Expiration of that charter in 1811 motivated the Rothschilds to foment the War of
1812- and in 1816, Congress granted a 20 year charter to the Second National
Bank, betraying every drop of patriot blood spilled in that war.
Putting his reelection entirely at risk in 1832, President Andrew Jackson vetoed
early renewal of the Second National Bank’s charter. In his second term, Jackson
ordered the withdrawal of all federal funds from its vaults- and fired two treasury
secretaries before finding one who would carry out that order. Jackson thereby
greatly reduced the bank’s lending power- and the anemic financial institution
gasped its last breath when the charter expired in 1836.
When President Jackson was asked to identify his greatest accomplishment, he
answered tersely, “I killed the bank.”
Fast forward to 1861. President Abraham Lincoln needed money for the Civil
War- and appealed to the large Rothschild-controlled banks. He was offered a
deal reminiscent of today’s credit card interest rates. Honest Abe stepped
through the horns of his dilemma- and started printing his own greenbacks. By
April 1862, he’d printed about $49,338,902 worth…
Lincoln would later lament to Congress in 1865, “I have two great enemies, the
Southern Army in front of me, and the financial institutions in the rear. Of the two,
the one in my rear is my greatest foe.”
Fast forward again to 1963. President John Fitzgerald Kennedy signed Executive
Order 11110, returning power to our government to issue currency- independent
of the Rothschild-controlled Federal Reserve. Should nary a shred of additional
evidence be offered on his behalf, Jack Kennedy hereby established himself as
one of the great Presidents in American history.
We may chase the last crooked politician from the halls of Congress. We may
completely eradicate the last vestige of socialism from American society. And
yes, we may exterminate Islamic extremist supremacy- but such victories will not
save our republic, lest we destroy the root of the great evil which assails usnamely the stranglehold of the international banking cartel upon our economy.
And does not the combined patriot wisdom of Presidents Jefferson, Madison,
Jackson, Lincoln and Kennedy accentuate the present paucity thereof in the
White House? Without even half a loaf of loyal Presidential leadership, we choke
upon a moldy crust of unprecedented arrogance, treachery and deceit!
Tags: abraham lincoln, arrogance, barry obama, deceit, federal reserve, john f kennedy,
lies, treachery
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Sources:
Ron Paul, Pillars of Prosperity, The Revolution- a Manefesto, END THE FED
G.Edward Griffin, The Creature from Jekyll Island
Thomas E. Woods, Meltdown
Aaron Russo, Freedom to Fascism
The US Constitution, James Madison
The Declaration of Indepence, Thoams Jefferson
The Bible, God
The Who What Where When of the Federal Reserve, Joe Plummer
Money as Debt, a video on Google Video
The Origins of the Federal Reserve (History) by Murray Rothbard a google video
The above cited references in note form copied and acknowledged by Wikkopedia
One might check other resources such as Campaign for Liberty:
www.campaignforliberty.com
www.mises.org
www.thedailybell.com
This just in from the Daily Paul: (concerning the Goldman Sachs /FED Scam)
http://www.dailypaul.com/node/128255?utm_source=feedburner&utm_medium=email&
utm_campaign=Feed%3A+dailypaul%2FFClq+%28The+Daily+Paul++Continuing+the+Ron+Paul+Revolution+Ron+Paul+for+President+2008%29&utm_cont
ent=Yahoo!+Mail
The link to Debt as Money a must watch to understand the development of banking
Fraud:
http://video.google.com/videoplay?docid=-2550156453790090544#