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Sunday, December 11, 2011

Returning To The Basics: money...

I believe that the writer has been using money in context of cash as opposed to the economist conception of M1,M2 and M3.

What Is Money?
Lincoln memorial cent, with the S mintmark of ...
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You would think this would be an easy question to answer – and it is, actually – but very few people seem to be able to, including most economists. This leads to all sorts of confusion, and the sort of disasters of incompetence that are now happening in Europe and elsewhere.
Ideally, today’s troubles will lead to a new monetary system, preferably a gold standard system. However, that would be difficult if nobody knows what money actually is.
As I argue in my book Gold: the Once and Future Money, money and credit are very different. Yes, I know there are many, many people who claim that “money is credit” and “credit is money.”
These people are confused. That is why, when you read what they write, you become confused also. Don’t you feel confused after you read this stuff?
The primary characteristic of money is that it is the item mutually acceptable as a means of payment.
forbes 1Dec 2011 : read full article