Right, it makes more sense in the world of a 'backed dollar'.
As it is, it is a debt to repay $1 for each $1 bill. You might well ask, $1 of what? Since the government doesn't produce anything, it is a strange kind of debt.
$1 of tax-forgiveness is one answer. $1 of whatever our citizens produce is another answer. This 2nd answer is the reason why the demise of the dollar as the world currency (aka wealth reserve function) could lead to hyperinflation in the USA as all those foreign-held dollars come flooding back, looking for something domestic to buy.
As long as the dollar is legal tender within the USA, foreign "creditors" (in the sense used in the above comments) can always get something back (however debased in value).
If like Brazil and Argentina, the USA defaults and creates a new currency (it'll never happen, right?) then good luck to all the drug-dealers of the world trying to cash in their old greenbacks.
b) money is a free-market good as in your example above. all the government was doing was weights and measures standardization.
c) only fiat (paper) money is a liability of the government because the original deal (FRNs) was that the notes would be exchanged for coin. That is why the note says promise to pay the bearer a dollar (which is a denomination of weight of silver or gold).
> The process of rapidly becoming a marketable commodity is called monetization.
No, its not. That's the process of printing money to pay off a debt. Or the act of a government making something legal tender. It might even be a tenable name for something becoming money (which isn't just a marketable commodity.)
Things often become marketable commodities -- even rapidly, especially when they are newly discovered or new uses are discovered for them -- without becoming money.
> Bitcoin is in a hypermonetization melt-up phase.
And now you've discovered why economics is a social science. It builds models of human behavior. Humans are non-deterministic at this scale. As soon as you build an economic model, it's possible it stops working because its existence influences the behavior of the humans its modeling.
I tried doing this on MtGox with a buy limit price of 1$. I didn't get any bitcoin :(
I do have a friend with 900btc though: I told him I was in the market for a dollar, and he just gave it to me, no questions asked. I wonder where he got it from?
As it is, it is a debt to repay $1 for each $1 bill. You might well ask, $1 of what? Since the government doesn't produce anything, it is a strange kind of debt.
$1 of tax-forgiveness is one answer. $1 of whatever our citizens produce is another answer. This 2nd answer is the reason why the demise of the dollar as the world currency (aka wealth reserve function) could lead to hyperinflation in the USA as all those foreign-held dollars come flooding back, looking for something domestic to buy.
As long as the dollar is legal tender within the USA, foreign "creditors" (in the sense used in the above comments) can always get something back (however debased in value).
If like Brazil and Argentina, the USA defaults and creates a new currency (it'll never happen, right?) then good luck to all the drug-dealers of the world trying to cash in their old greenbacks.
<edit: phrasing!>