Though its important, I don’t think its necessary to know the intricacies of double entry book keeping.<\/p>\n\n\n\n
Money is a social relation. It is a generalised claim on a part of the product of the economic domain of the authority which supports it. Being legal tender means that this claim is supported by property laws, contract laws etc.<\/p>\n\n\n\n
The banks money making trick is that it can take an IOU (a loan contract) and turn it into a bank asset – and – corresponding to the bank asset, create a deposit of legal tender.<\/p>\n\n\n\n
Any repayments on the loan then writes down the value of the bank asset and disappears.<\/p>\n\n\n\n
Money then also has a scope (or domain) which is defined by the extent of the reach of the authority which supports it. Within this domain money is not a commodity, but the unit of account in which commodities express their relative value.<\/p>\n\n\n\n
Money only becomes a commodity when it leaves its domain and confronts money from other domains.<\/p>\n","protected":false},"excerpt":{"rendered":"
Though its important, I don’t think its necessary to know the intricacies of double entry book keeping. Money is a social relation. It is a generalised claim on a part of the product of the economic domain of the authority … L\u00e6s resten