Then why isn't oil (or corn for that matter) money? Being a commodity has nothing to do with being money.
Real money always has started out as something useful.
Great Britain used "tally sticks" quite successfully for over 700 years as both their currency and money. Are you saying that sticks with notches in them are useful?
Gold is REAL money and serves as a valuable medium of exchange and currancy should be backed 100% with it.
Gold is not "real" money, since money is what society defines it to be. Right now, the international banks have forced debt-based "money" on all nations - which simply means that all of our currency is backed by debt (the promise of our future labor).
We do not need "gold" to have a proper form of currency. Instead, we need currency that is not backed by debt, but instead by the "completion" of our labor. The US Treasury should issue our currency - not the Federal Reserve. This is where the actual problems lies.
We are not in a deflationary environment, the FED is inflating as fast it can.
You're wrong. First off, why is the US government deficit spending as fast as it can? Answer: We're in a depression. Why is Western Europe imploding? Answer: They're in a depression. Why is China spiraling down? Answer: They're in a depression. The entire world is in a depression that was forced upon us by international banks pulling access to credit (debt). The stock market is currently rallying because the drug addicts (us) think that large amounts of new debt are on the immediate horizon.
The Fed does not "print money". The Fed does not "create" money. Instead, the Fed issues "currency", which is backed by money (securities). You also create money every time you use your credit card (you get debt, the owner of your debt gets claims on your future labor - or "money").
We just haven't seen a rise in most prices due to drop in demand, but the effect of inflation, malinvestment of capitial goods is still occuring and will result in a 'bust' soon.
You're wrong. The money supply (claims on the promise of future labor) is crashing all over the globe. Again, that's why both Democrats and Republicans alike are seeking to deficit spend and encourage Americans to enter new debt as fast as possible (TARP, student loans, cash for clunkers, etc., etc., etc.)
It's why the Euro Zone is desperate for the concept of a "Euro bond" that they can sell on a "Federal" level like we do with our US Treasuries.
We do see some price inflation, but it's accompanied by monetary deflation. Price inflation is a natural occurrence of a Depression, as companies run out of cost-cutting options except for raising their prices.
Then why isn't oil (or corn for that matter) money? Being a commodity has nothing to do with being money.
Because money has to have other attributes as well, such as the ability to serve as a means of indirect exchange.
All real money can be traced back to it's use value.
The Fed creates money out of thin air via credit and keeping interest rates artificially low.
Tally sticks were viewed as money because of government fiat, that was why they were considered money, no different then the paper dollar today.
They did not come from the Market, where real money comes from.
As soon as Gold was allowed to compete with it, it ended it as money. I have no problem with the treasury issuing currency and ending the Fed.
But currency needs to be backed by gold so the currency cannot just be created out of thin air, destroying it as money.
The government is spending because that is what Government does!
In reality, the federal government never is in deficit since it really is just a matter of how it is going to pay the bills, borrowing or printing money.
The bills always get paid, but of course the nation is much poorer because of the drain on the economy through taxes, direct or indirect.
The economies are crashing because of their excessive spending and that is bleeding the economies.
We don't see as much price inflation as we should because of the lowering of demand, but the inflation is still occurring since interest rates are not at the levels they should be, they are still being kept too low, resulting in malinvestment in higher goods.
What you are seeing is the 'bust' of many years of 'boom' inflation.