Re: two currencies and Korean war

["Alan G. Isaac" <aisaac@xxxxxxxxxxxx>]

On Tue, 8 Jan 2002, Warren Mosler wrote:
> legal tender is for discharge in courts of law.  since discharge is at
> 'market prices' it has no effect on value.
> (see legal tender discussion in Maastricht treaty that formed the euro)

Again this simply highlights the blind spot in chartalism.
Of course it affects value: it affects value by affecting
the expectations about the acceptability of the legal tender
in exchange.  Expectations are fundamental.  Institutional
mechanisms simply support expectations.  That fact that
neither legal tender laws nor tax collection represent
necessary conditions for fiat currency to be held does not
mean that neither are important.

Cheers,
Alan Isaac