The wad of green paper you have in your pocket, the folds of bills in your wallet, stacks of federal reserve notes neatly stacked in your safe, or the change in the cup holder of your car, What is it and why does it matter.By definition, it’s something of value. But over the last 10,000 years, the material form that money has taken has changed considerably—from cattle and cowrie shells to today’s electronic currency.
Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given socio-economic context or country.[1][2][3] The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally in the past, a standard of deferred payment.[4][5] Any kind of object or secure verifiable record that fulfills these functions can serve as money.
Money is historically an emergent market phenomena establishing a commodity money, but nearly all contemporary money systems are based on fiat money.[4] Fiat money is without intrinsic use value as a physical commodity, and derives its value by being declared by a government to be legal tender; that is, it must be accepted as a form of payment within the boundaries of the country, for "all debts, public and private".
The money supply of a country consists of currency (banknotes and coins) and bank money (the balance held in checking accounts and savings accounts). Bank money usually forms by far the largest part of the money supply. ---- FROM WIKIPEDIA
But what is valuable about today's money and the future's electronic funds? Nothing, value is in the eye of the beholder. If I were to start creating my own form of money and passing it out at a bank I have set up in my home or office, there would be no value to the paper unless you valued it as real currency. If I were to pass out millions of pieces of paper to everyone and then set up a store where you could buy products, would there still be no value? No, if you wanted to purchase something from my store you would have to use my money which in turn has now made my money valuable to you.
How is money backed? Well for a long time it was backed by precious metals, gold and silver, but now days we have what is know as FIAT money, FIAT money is dangerous in the fact that the central bank can determine what the "value" of the currency is. Fiat money or fiat currency is money whose value is not derived from any intrinsic value or guarantee that it can be converted into a valuable commodity (such as gold). Instead, it has value only by government order (fiat). Usually, the government declares the fiat currency (typically notes and coins from a central bank, such as the Federal Reserve System in the U.S.) to be legal tender, making it unlawful to not accept the fiat currency as a means of repayment for all debts, public and private.[25][26]
Some bullion coins such as the Australian Gold Nugget and American Eagle are legal tender, however, they trade based on the market price of the metal content as a commodity, rather than their legal tender face value (which is usually only a small fraction of their bullion value).[23][27]
Fiat money, if physically represented in the form of currency (paper or coins) can be accidentally damaged or destroyed. However, fiat money has an advantage over representative or commodity money, in that the same laws that created the money can also define rules for its replacement in case of damage or destruction. For example, the U.S. government will replace mutilated Federal Reserve notes (U.S. fiat money) if at least half of the physical note can be reconstructed, or if it can be otherwise proven to have been destroyed.[28] By contrast, commodity money which has been lost or destroyed cannot be recovered
If the people see no value in it, it is worthless, but the central bank and government have made it illegal to turn down their money for all debts public and private, you can make the suggestion to be paid by some other form, but you cannot deny someone to pay their debt to you with federal reserve notes, sucks huh?
So what can we do about this, we could go back to a gold and silver backed money, but the federal reserve and the united state government doesn't want to see this happen. We could End the Federal Reserve, but where would that get us? We could go back to the Constitution that says that all money and its value is to be determined and set by congress. But congress has enabled the federal reserve to set the value of money, and to print off more money, with absolutely no oversight. The congress doesn't actually know what the Federal Reserve does anymore with our money system.
What is the Federal reserve and what does it do? check this link for a Wikipedia overview of the system.
Another good article is this..http://motorcitytimes.com/mct/2010/11/what-would-money-look-like-if-we-ended-the-fed/
All in all it comes down to a choice, do we allow one central bank, given power by our own government to destroy our national monetary system.Or do we push for a full audit of the Federal reserve system, find out what hard metal reserves we have left, find out how much of the counterfeit bills have made it into the hands of foreign nations and return to a free market and a free banking system. Can we afford not to?
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