"Money, simply put, is anything people use to pay for goods and services."
There may have been times when money was only used for this purpose. But since the arrival of FIAT money, the rules of the game have changed. This is because FIAT-money actually comes into circulation when a central bank, which can issue (create) FIAT-money, then credits (promises) an amount of it against a promise of repayment and then, if necessary, hands it out. And this means that the debtor, who can dispose of this money for a limited period of time, has to start offering (produced) goods (or services) in order to acquire the money to repay the debt. This is what is happening on the markets for produced goods today, namely that the suppliers of these goods see them not as value but as a means of attracting FIAT money. After all, it is not a matter of course that produced goods are sold for an intrinsically worthless object.
And then the arbitrariness of money (...is anything...) is over, because sellers of goods do not want just anything, but exactly the money they need to pay off their debts. In addition, they have to pay the turnover tax due on a sale in a certain kind of money, so that the range of possibilities is very quickly limited to exactly the legal tender money. (By the way, "cigarette money" was not so much a medium of exchange as a standard of value for determining current prices in local currency in order to then pay with the mostly (hyper-)inflationary money. Cigarettes were rarely exchanged directly).
The concept of interpreting FIAT money as a means of covering debts for producers or sellers of goods also explains why it is completely unnecessary to give FIAT money an intrinsic value. On the contrary, this would even be detrimental if the price calculation for goods is also disturbed by an intrinsic value of the means of payment. From the point of view of the instrument for debt repayment, the "legal tender" formulation is in itself meaningless, because the entrepreneur's interest consists precisely in receiving this money for goods to avoid default and losing collateral (acceptability is automatically built into it). The "legal tender" rule has more of a historical significance when it came to replacing the metal currency and people did not want their claims to be paid in (for them) worthless paper money. A lot of help had to be given, but those days are long gone.
And the CBDC? They are just as much "book money" as the deposits at a commercial banks, namely option rights that give the holder the right to instruct (!) the payment service provider either to pay out money (withdrawal) or to bring about a debt relief success vis-à-vis a precisely designated person who has a claim. The only difference is that the rights vis-à-vis a central bank are not at risk of default - a not insignificant difference. At the end of the day, CBDCs are an alternative to the "book money" of banks but not to cash.
There exists currently no alternative to cash, when cash is defined as a medium for final payment without need for a payment service provider. CBDCs are not what is claimed they are, because they are debt relationships. And debt relationships are not means of payment, as we can clearly see from bank failures: there are too many debt relationships (deposits - a liability for the bank) awaiting to be settled (in central bank money), but means of payment (cash and reserves - an asset for the bank) are the element that is missing. The digital innovation that can actually replace cash has not yet been found.
Haven't private CBDCs been around for a few years? How are those 'apps' doing?
I have zero trust in a government CBDC. The Bank of Canada asked Canadians for their opinions. I'm pretty sure it was enormously unpopular and that the BdC didn't read them or care.
So it sounds as though there are limits to whether the government can actually force this. Did I read it right?
I read the fear over CBDC controlling carbon footprint, wrong opinion = can't buy food, etc. However, Canada was able to freeze bank accounts, revoke licenses, etc. during the very peaceful trucker protests. Interesting times....
Thank you for the Scripture, it's in within a great context and I'm grateful for the reminder to be content:
1 Timothy 6:6-11
But godliness with contentment is great gain, for we brought nothing into the world, and we cannot take anything out of the world. But if we have food and clothing, with these we will be content. But those who desire to be rich fall into temptation, into a snare, into many senseless and harmful desires that plunge people into ruin and destruction. For the love of money is a root of all kinds of evils. It is through this craving that some have wandered away from the faith and pierced themselves with many pangs. But as for you, O man of God, flee these things. Pursue righteousness, godliness, faith, love, steadfastness, gentleness.
"Money, simply put, is anything people use to pay for goods and services."
There may have been times when money was only used for this purpose. But since the arrival of FIAT money, the rules of the game have changed. This is because FIAT-money actually comes into circulation when a central bank, which can issue (create) FIAT-money, then credits (promises) an amount of it against a promise of repayment and then, if necessary, hands it out. And this means that the debtor, who can dispose of this money for a limited period of time, has to start offering (produced) goods (or services) in order to acquire the money to repay the debt. This is what is happening on the markets for produced goods today, namely that the suppliers of these goods see them not as value but as a means of attracting FIAT money. After all, it is not a matter of course that produced goods are sold for an intrinsically worthless object.
And then the arbitrariness of money (...is anything...) is over, because sellers of goods do not want just anything, but exactly the money they need to pay off their debts. In addition, they have to pay the turnover tax due on a sale in a certain kind of money, so that the range of possibilities is very quickly limited to exactly the legal tender money. (By the way, "cigarette money" was not so much a medium of exchange as a standard of value for determining current prices in local currency in order to then pay with the mostly (hyper-)inflationary money. Cigarettes were rarely exchanged directly).
The concept of interpreting FIAT money as a means of covering debts for producers or sellers of goods also explains why it is completely unnecessary to give FIAT money an intrinsic value. On the contrary, this would even be detrimental if the price calculation for goods is also disturbed by an intrinsic value of the means of payment. From the point of view of the instrument for debt repayment, the "legal tender" formulation is in itself meaningless, because the entrepreneur's interest consists precisely in receiving this money for goods to avoid default and losing collateral (acceptability is automatically built into it). The "legal tender" rule has more of a historical significance when it came to replacing the metal currency and people did not want their claims to be paid in (for them) worthless paper money. A lot of help had to be given, but those days are long gone.
And the CBDC? They are just as much "book money" as the deposits at a commercial banks, namely option rights that give the holder the right to instruct (!) the payment service provider either to pay out money (withdrawal) or to bring about a debt relief success vis-à-vis a precisely designated person who has a claim. The only difference is that the rights vis-à-vis a central bank are not at risk of default - a not insignificant difference. At the end of the day, CBDCs are an alternative to the "book money" of banks but not to cash.
There exists currently no alternative to cash, when cash is defined as a medium for final payment without need for a payment service provider. CBDCs are not what is claimed they are, because they are debt relationships. And debt relationships are not means of payment, as we can clearly see from bank failures: there are too many debt relationships (deposits - a liability for the bank) awaiting to be settled (in central bank money), but means of payment (cash and reserves - an asset for the bank) are the element that is missing. The digital innovation that can actually replace cash has not yet been found.
Here's hoping CBDC fails in Canada.
Haven't private CBDCs been around for a few years? How are those 'apps' doing?
I have zero trust in a government CBDC. The Bank of Canada asked Canadians for their opinions. I'm pretty sure it was enormously unpopular and that the BdC didn't read them or care.
So it sounds as though there are limits to whether the government can actually force this. Did I read it right?
I read the fear over CBDC controlling carbon footprint, wrong opinion = can't buy food, etc. However, Canada was able to freeze bank accounts, revoke licenses, etc. during the very peaceful trucker protests. Interesting times....
Thank you for the Scripture, it's in within a great context and I'm grateful for the reminder to be content:
1 Timothy 6:6-11
But godliness with contentment is great gain, for we brought nothing into the world, and we cannot take anything out of the world. But if we have food and clothing, with these we will be content. But those who desire to be rich fall into temptation, into a snare, into many senseless and harmful desires that plunge people into ruin and destruction. For the love of money is a root of all kinds of evils. It is through this craving that some have wandered away from the faith and pierced themselves with many pangs. But as for you, O man of God, flee these things. Pursue righteousness, godliness, faith, love, steadfastness, gentleness.