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.
You're confusing "money" and "currency". They are not always the same - especially in a debt-based economy. Yes, "currency" is used as an indirect exchange, while our form of "money" is not.
Gold and silver can be used as "currency" in our country at face value, or by weight if the US Secret Service doesn't pay you a visit for doing that too often. However, gold and silver are not "money" in our economy, since "money" all across the world right now is defined as "the value owned through a promissory note". (I know, you don't read that in too many college textbooks, but the definition is a correct one).
"All real money can be traced back to it's use value."
If we're talking about a "properly run" economy then, yes, money can be traced back to its base - the "completion of labor that has economic value".
"The Fed creates money out of thin air via credit and keeping interest rates artificially low."
That's entirely not true. The Fed issues "currency" against a certain amount of securities that it purchases from Primary Dealers (banks). The Fed never "creates money out of thin air" since it doesn't primarily issue loans. You need to look at the H.4.1 report that the Fed issues weekly. It contains their balance sheet.
Having said this, the Fed needs to be abolished - because they favor the continuance of debt-based money. Instead, the US Treasury should issue our currency - and the issuance should be against completed labor, not debt.
"Tally sticks were viewed as money because of government fiat, that was why they were considered money, no different then the paper dollar today."
There's absolutely nothing wrong with paper currency - or tally sticks for that matter. What makes it wrong is when it's issued against debt. The debate really has nothing to do with precious metals. Paper currency issued by our US Treasury against completed labor would be FANTASTIC!
"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."
On that we agree, my FRiend.
"But currency needs to be backed by gold so the currency cannot just be created out of thin air, destroying it as money."
No, currency needs to be backed by "completed labor" - which would be controlling in itself, since only so much labor gets completely in a sovereign nation each year. Any excessive issuance could be taxed back in to the US Treasury and destroyed, as needed.
"The government is spending because that is what Government does!"
Your wrong. Remember when a $300 million deficit was absolutely HUGE! Then President Bush brought us TARP - because he had no choice. Our nation's money supply is controlled completely by bankers. When they shut off credit it was like putting a boot on the throat of our nation. The US government knew that they had to create new debt as fast as possible, or the public would see the real results of an enormous depression. That was the wrong move by our government. Instead, they should have abolished the Fed and had the US Treasury issue our currency. However, the banks could then have threatened to immediately stop clearing every financial transaction they had control over. Chaos would have resulted. What would you have done?
"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 Federal Government can only "create" new money by using income from its Trust Funds to buy US securities. That's why the Health Care "trust fund" is being established - it has absolutely nothing to do with health. Social Security and Medicare now have more outlays than income - so there is nothing in the "middle" to purchase securities with. Other than this, the Federal government has no means of creating money - and the Fed does not create money either.
"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 inhabitants of our nation are like frogs in a boiling pot. We have been made into financial slaves of the banks - and given away our nation to them.
"The economies are crashing because of their excessive spending and that is bleeding the economies."
They're crashing because their money supplies are crashing. When a loan defaults then it means that the "claim on future labor" against that promissory note will never be completed. This reduces the money supply by the amount of the default. Debt-based economies run on promissory notes. There are not enough of them right now - which is why the EuroZone is clamoring for the creation of Euro bonds.
"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."
We don't see much price inflation because we're in a depression. Think about it for one minute. Our nation's GDP is roughly $14 trillion/year. Our Federal government deficit spends at roughly $2 trillion/year (even though they lie and pretend it's a little lower).
10% of $14 trillion is $1.4 trillion. In other words, the nation's GDP would be more than 10% smaller is we stopped deficit spending tomorrow. The GDP during the Great Depression shrank a little over 10%, before international war broke out to re-introduce gradual inflation (brought on by the bankers, who funded all sides of the war effort).
"What you are seeing is the 'bust' of many years of 'boom' inflation."
No, I'm seeing a repeat of history. Remember the "Roaring 20's". Remember 1929? Remember the recovery after 1929? Remember the even larger bust that occurred after the fake recovery? Remember the New Deal? Remember the international war, where money was well placed to turn losers into leaders (like Adolf Hitler, who was a nobody until he got funding)?
People need to remember history. I fully believe we are heading for another world war, were many people will be killed - not for patriotism - but merely as the way that the banks use to re-introduce gradual inflation into the world economies and become even wealthier and more powerful.