Re: Nell's point w/r to Mosler on money

[Christopher Niggle <niggle@xxxxxxxxxxxxxx>]

June 6

I agreement with Ed Nell...

Many forms of money generally circulate simultaneously.  The money forms
accepted as "legal tender" are those declared as such by the "sovereign"
state, and ultimately the status of legal tender is linked to the state's
acceptance of that money form in payment of taxes.  In some societies, in
some eras, the state would also statutorily define some money forms as
legal tender by declaring that all debts paid in that form must be
considered to have been lawfully discharged.   So the legal system and
political institutions determines legal tender.

Competing money forms' acceptance ultimately is linked to their
convertibility into legal tender (we accept checks written on each
others' commercial banks because we assume the banks to be well-managed
and abiding by monetary authorities' rules for conversion into legal
tender upon demand).

Maybe I'm missing something, but almost every money and banking text
generally explains these principles of money form status early on - in
chapter one or two.  Straighforward.

Chris Niggle