When racing thoughts at midnight compel me to get up and write them down because they just can't wait until morning I know that I am getting somewhere in whatever I am struggling to do.
It is midnight. So I write.........
Asset Money and Debt Money
There are only two kinds of money in the money system. Asset Money and Debt Money. That is a simply stated factual statement of given truth. This is all that money in essence is. That is what the fact that the money system is built on. Now I could go back to bed. Couldn't I have held that thought until morning? No, I was afraid that I would have awaken to find that what I saw so clearly in a dream had eluded me! Gotcha written down now, in the bag. Now I could go back to bed.
Since I am awake and excited I can't sleep so I will expand this idea to frontiers of complexity. I will write excessively about it far beyond the flash of recognizing of its beauty as I read it written on the wall somewhere in the realm of dreams and where it screamed at me to wake up. Get busy.
Asset Money
Asset money is some kind of money that has some kind of a relationship to an asset. Duh. It starts simple. The rule says: Keep it simple. I won't. I will, but later, when the time comes. Whatever that relationship is between money and asset consequently defines what Asset Money is.
The only Asset Money the USA is coins. I will call it Asset Money with Capital A and M because it is a defined term describing money in the current money system of the USA. In the new money system it will be called New Asset Money. Dealing with that new system is many midnights away but I will get there if I keep in mind where I am going and I am not going there tonight. When I get to talking about Asset Money in more formalized terms of object oriented modelling it will be called AssetMoney. That also is not for tonight.
Asset money of the USA (AssetMoneyUSA if you want a glimpse of where this is going in the Object model) is coins and only coins. Coins are the only Asset Money of the USA. Asset Money is called other things but it is all the same thing. Sovereign money. State money. Government created money. Real money. Just different names. I will consistently use Asset Money. If I was an expert I would use a fancier name.
The government has the power to create Asset Money. That power is held by congress and is specified in the Constitution, Article 1, Section 8:
To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;
Article 1 Section 10 says that power to coin money is prohibited to the States:
No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.
That is all the Constitution says about money. While "coin Money" evokes images of a machine spitting out metal tokens, I think the Constitution can be interpreted as meaning that "coin Money" means create Asset Money.
Larry Larkin has some excellent comments here regarding the power of Congress to create Asset Money.
I will wrap this up by repeating the opening sentence in this Asset Money section:
Asset money has some kind of a relationship to an asset.
Debt Money
Debt Money is some kind money that has a relationship to debt. Duh. Whatever that relationship is between money and debt consequently defines what Debt Money is.
Money
This is not where I will describe what money is. I am still working toward that by finding classes of things that are a kind of money. When all those classes are found then we can see money as a fundamental thing they have in common. That is where this is all going. Right now I am sorting out cats and dogs to find out what they have in common to be called animals. This is just a sidebar about the methodology of looking at sub categories of money that gets me to the discovery of what money is. Perhaps it will also help define what money is not and therefore be properly identified with another class of thing. It is a long journey. I once rode my bike 5,000 miles across country and read all of Mitchener's books. (Groan). Most of the fun is getting there.
We organize our conceptual thinking into classes that are just the collective name of all individual things in a given class that share a common characteristic. Classes form hierarchies. In school we learned the biological classification: Kingdom, Phylum, Class, Order, Family, Genus, Species. Maybe you forgot. One way of remembering is KPCOFGS, Keep Paying Casey Off For Gun Sales. That was biology. A way to describe things to the extent they shared characteristics from higher to lower levels. Since I learned this there are two even more general classes placed above Kingdom. The first is Domain and the second which really encompasses everything in biology is Life.
Class discovery is done by asking what kind of a thing is this. All the same kind of things go into a single class. For example: We know why all dogs are collectively called dogs or, in other words are in the class called dog. To discover the next higher level of class that a dog belongs to simply ask what kind of a thing is a dog? A dog is an animal, etc.
What kind of a thing is Asset Money? What kind of a thing is Debt money? Who is buried in Grant's Tomb? Just keeping the thought process simple here. Yes, the answer to the first two questions is that they are each distinct kind of Money. The answer to the last question is no one. Look it up. Trick question. If you said Grant, I hope you can stay with me. The point of the joke is to expose the less knowledgeable amongst us. Things are going to get more complex.
Fiat Money
This is where it gets more complex. However, to be consistent I will describe Fiat Money in the same format that I described Asset Money and Debt Money. Fiat money is some kind of money that has a relationship to fiat. Fiat is not a common word like asset and debt but it means:
1: a command or act of will that creates something without or as if without further effort
2: an authoritative determination : dictate <a fiat of conscience>
3: an authoritative or arbitrary order : decree <government by fiat>
In other words: Whatever some authority says is money is money.
The following is the Wikipedia definition. Click here to see the full explanation of Fiat Money
Fiat money is money that has value only because of government regulation or law. The term derives from the Latin fiat, meaning "let it be done", as such money is established by government decree. Where fiat money is used as currency, the term fiat currency is used. Today, most national currencies are fiat currencies, including the US dollar, the euro, and all other reserve currencies, and have been since the Nixon Shock of 1971.
The term fiat money has been defined variously as:
A feature of all fiat money is its (typically exclusive) acceptability to the government for payment of taxes and charges.
This is my thinking, at least at this point which is almost 3 in the morning:
- any money declared by a government to be legal tender.[1]
- state-issued money which is neither legally convertible to any other thing, nor fixed in value in terms of any objective standard.[2]
- money without intrinsic value.[3]
A feature of all fiat money is its (typically exclusive) acceptability to the government for payment of taxes and charges.
This is my thinking, at least at this point which is almost 3 in the morning:
Both Asset money and Debt money share the common characteristics of Fiat Money. Therefore Fiat Money seems to be a class of Money to which they both belong and therefore inherit as children all the characteristics of the parent class. However, each has additional uniquely distinctive characteristics that make them obviously a sub class of the class Fiat Money.
This is where it gets trickier. Fiat Money may also inherit the characteristics of more than one parent class. In the Object Oriented view this is called Multiple Inheritance. This is where it gets more complex. However the Object Oriented method works to reduce complexity. Further however: At this level of complexity, narrative explanation starts to fail and graphical representation of things and their relationships is necessary to handle the increasing level of complexity where natural language word structures start to fail. There are simple too many balls up in the air being juggled at the same time in a three ring circus. It becomes easier to see and understand rather than describe.
This is where I go to bed.
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