by Ron Paul doesn't understand what money is because he thinks it has to be commodities, including gold and silver - that is, money has to have intrinsic value in itself.Money is a ledger system which helps us to pay each other for work done. If someone pays me money for work that I have done for them, then I can use that money to pay someone else to do work for me, and in this way we have exchanged work. Fiat money is the system we use to exchange work with each other.The system works on trust, and everyone in the U.K. trusts a £10 note without even thinking about it. No one questions the money they use.The banks can facilitate this system by issuing credit. So, if I borrow 0 and pay someone to do work in my garden, I will have to pay interest on the loan until it is repaid. The only way
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Money is a ledger system which helps us to pay each other for work done. If someone pays me money for work that I have done for them, then I can use that money to pay someone else to do work for me, and in this way we have exchanged work. Fiat money is the system we use to exchange work with each other.
The system works on trust, and everyone in the U.K. trusts a £10 note without even thinking about it. No one questions the money they use.
The banks can facilitate this system by issuing credit. So, if I borrow $100 and pay someone to do work in my garden, I will have to pay interest on the loan until it is repaid. The only way I can pay the loan back is by working for someone else to earn the $100, plus interest owed (the interest is how the bank gets paid for doing work). So, all the bank has done is to help me to exchange work with someone else - and charged me a small fee for doing so.
If we have fiat money in our pocket, that is really work that is owed to us because we did work for someone else who paid us. With this money we can buy work, or something that has been made.
The government commands the system by issuing fiat, which sets the standard for the banks to use. Fiat money is real money because society will work for it, and that's what gives it it's value.
Authoritarians always rely on "intellectual" justification when selling their schemes to the public. This is why you constantly hear the term "experts say" before your liberty and property are taken from you. Democratic Socialists have been latching onto "Modern Monetary Theory" in order to justify their takeover of American life. Ron Paul discusses on today's Liberty Report!