What Makes Money Have Value?
Executive Summary
- Money is most often an assumption rather than something to be questioned. However, it is a necessary question to ask what gives money value.
Introduction
This is a major point of confusion and is something that private banking interests deliberately exploit.
Money is what governments say is money.
All that is necessary is for the government to declare that the payment of taxes will only be accepted in that money (and then it must also collect those taxes).
Therefore is no need to “back” money with anything else by the assertion by the government that it is backed by the full credit and faith of that government, and that it is to be used for all debts. And the history of money backed by a precious metal (the normal standard) brings up a number of problems that are normally left undiscussed. The most successful currency in history was the tally stick of Britain, and it was not backed by any precious metal or anything else.
What About Devaluation Since the US Went Off the Gold Standard?
Those that point to the devaluation of the US dollar after 1971 when the US halted international convertibility to gold, seem to leave out the greater devaluation of the dollar after 1913 to 1929 when the US was still on not only international convertibility of the dollar into gold but domestic convertibility into gold (which Roosevelt halted in 1933). This is why it is not correct to point to 1971 as the year the US went off the gold standard, as internal convertibility was suspended 37 years before this time. This is something rarely mentioned.
The True History of US Dollar Devaluation from 1913 Onward
The US dollar has been continuously devaluating (at different rates) since the Federal Reserve was brought into effect in 1914 so that the US dollar is now worth roughly 3% of what it was in 1913. And this was a time that was supposed “Shangri La” according to mainstream economics. That is a time where private banking interests control the central bank.
This is explained in the following quotation.
“As Vernon Parrington pointed out, the real issue was not what money consisted of, but who created it. (emphasis added) Whether the medium of exchange was gold or paper or numbers in the ledger, when it was lent into existence by private lenders and was owed back to them with interest more money would always be owed back than was created in the first place.”
Source: The Web of Debt
https://www.amazon.com/Web-Debt-Shocking-Truth-System/dp/0983330859
Theories of State Created Money
There are at least two theories of money that have been proposed, that are over a hundred years apart that support this conclusion.
- The State Theory of Money by George Friedrich Knapp
- The Seinorage Theory of Money by Giacinto Auriti
Both of these people have entries on this website.