Inflation and Deflation of Price and Money Supply

[Atdhe]

Money is always debt. Or a promise that the receiver of the currency will give back something in equal value.

Imagine you live in money-free economy. For simplifikation - just two people: you and your girl. One day you wash the plates from dinner for exchange and promise that next day she washes the plates. The promise/debt is the money, even when there is nonexistent money. In small economy money do not always exist, because there is big trust and everyone has the "blockchain" in their head. But in the bigger economies the money, that are pure symbol in small economy, but have some proxy that is hard to falsified, can be divided, traded, is rare etc.

BTC has future, because it is best as this proxy, if the algo is really impossible to break. Fiat money is otherwise great, but it can be and is falsified by states. Commodity money is hardr to falsify, but the transaction costs with currency as gold or cows or cigarettes is too high even for less developed economies than ours.

Any conversation about money must start with understanding that money is debt by definition and it will never be something else.

[1713905219]

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[dinofelis]

Imagine you live in money-free economy. For simplifikation - just two people: you and your girl. One day you wash the plates from dinner for exchange and promise that next day she washes the plates. The promise/debt is the money, even when there is nonexistent money.

No, that's a debt.

Money is the following: One day you wash the plates against her coat.  You keep the coat, and you expect that the next day, she'll want her coat back.  Then you negociate that she does the dishes for it.  It might very well be that she's not interested.  Too bad for you.

The difference is that in the first case, there was a promise, a contract.  It was an exchange: ".I do the dishes today, and you do them tomorrow, agree ?".  When you did the dishes, you did your part of the contract, and now she's supposed to do her part of the contract.

With the coat, there is no contract for her doing the dishes.  It might be cold the next day, and you could negociate that she gets her coat back if she does the dishes for two weeks in a row.  Or it might be hot and she doesn't care about her coat.

No contract is broken.  The coat was money.

The promise was a debt.

[dinofelis]

Money is always debt. Or a promise that the receiver of the currency will give back something in equal value.

...

Any conversation about money must start with understanding that money is debt by definition and it will never be something else.

The point you make there is extremely important, and illustrates why money is exactly NOT debt.  I tried to illustrate it in several ways, but in fact you hit the key point: money is exactly so that you are by definition not guaranteed to get back something in equal value.

The reason for that is that (dynamical) markets exist, and that prices change constantly.

Now, debt being the "second part of a contract, of an agreement", it is not only a liability from which de debtor cannot escape (unless he's broke), it is also a well-defined agreement, of a known value to the creditor.

In the example you used, the agreement is "I do the dishes today, and you do the dishes tomorrow".  Not only is the second part of the agreement ("you do the dishes tomorrow") a liability to which the debtor is held liable, it is also a very well defined debt "doing the dishes tomorrow".  There is no "price fluctuation" possible here, because the two parts of the agreement were clear.

Money has exactly the opposite meaning.  The whole idea of money is that it is an intermediate asset, of which you haven't yet decided how to spend it, when to spend it.  In other words, when you accept money in return for something you do or give now, you have no idea what you are going to be wanting in return for it, or when you want it.  This is a very important aspect of indirect trade: not having to decide yet today for tomorrow.

Maybe tomorrow you would like her to do the dishes, but maybe you will want to save that for something else, and maybe you want her to make an apple pie.  You cannot fix into a contract today what you haven't decided yet for tomorrow. 

The counterpart of that, is that the prices of things in money are not fixed either.  It depends on people's wishes tomorrow, what they want to offer, and what they want to get.  One of the things that people will wish tomorrow is to keep money or to spend it (the aggregate demand for storage of value).  These things change over time.  People make different decisions tomorrow than today.  Offer and demand (also of money) changes tomorrow from today in an unpredictable way.  You have the freedom to only decide tomorrow what to do with your money and other assets, and so do other people.  As such, prices change.  The value of money changes.  It is an important part of money, that its value changes over time, and that prices change over time, because they are exactly the consequences of the changes in wishes of people, also concerning money.

So money is exactly not what debt is: a fixed, wel-defined unescapable liability.  It is a flexible exchange and nobody is forced to accept it.

[Erdogan]

Money is always debt. Or a promise that the receiver of the currency will give back something in equal value.

...

Any conversation about money must start with understanding that money is debt by definition and it will never be something else.

The point you make there is extremely important, and illustrates why money is exactly NOT debt.  I tried to illustrate it in several ways, but in fact you hit the key point: money is exactly so that you are by definition not guaranteed to get back something in equal value.

The reason for that is that (dynamical) markets exist, and that prices change constantly.

Now, debt being the "second part of a contract, of an agreement", it is not only a liability from which de debtor cannot escape (unless he's broke), it is also a well-defined agreement, of a known value to the creditor.

In the example you used, the agreement is "I do the dishes today, and you do the dishes tomorrow".  Not only is the second part of the agreement ("you do the dishes tomorrow") a liability to which the debtor is held liable, it is also a very well defined debt "doing the dishes tomorrow".  There is no "price fluctuation" possible here, because the two parts of the agreement were clear.

Money has exactly the opposite meaning.  The whole idea of money is that it is an intermediate asset, of which you haven't yet decided how to spend it, when to spend it.  In other words, when you accept money in return for something you do or give now, you have no idea what you are going to be wanting in return for it, or when you want it.  This is a very important aspect of indirect trade: not having to decide yet today for tomorrow.

Maybe tomorrow you would like her to do the dishes, but maybe you will want to save that for something else, and maybe you want her to make an apple pie.  You cannot fix into a contract today what you haven't decided yet for tomorrow. 

The counterpart of that, is that the prices of things in money are not fixed either.  It depends on people's wishes tomorrow, what they want to offer, and what they want to get.  One of the things that people will wish tomorrow is to keep money or to spend it (the aggregate demand for storage of value).  These things change over time.  People make different decisions tomorrow than today.  Offer and demand (also of money) changes tomorrow from today in an unpredictable way.  You have the freedom to only decide tomorrow what to do with your money and other assets, and so do other people.  As such, prices change.  The value of money changes.  It is an important part of money, that its value changes over time, and that prices change over time, because they are exactly the consequences of the changes in wishes of people, also concerning money.

So money is exactly not what debt is: a fixed, wel-defined unescapable liability.  It is a flexible exchange and nobody is forced to accept it.

Perfectly well spoken. The reason that folks think that money is a promise, may be the following: When you trade, and want to delay till tomorrow to decide what you want goods or service you want to consume, you choose something that many others want, and that stuff becomes money. You have money, and know they are useful for just about anything. That is the liquidity of the money. High liquidity is not a promise however, the value of the money has to be discovered in the next trade.

[painlord2k]

In fact, Menger described money and the adoption of a commodity as money, as the commodity with the higher level of resellability, not purchasing power stability.
When people acquire money they do desire purchasing power stability, but implicitly they expect maximum resellability. When you spend money to acquire something, there no delay in people accepting it, like there could be with people selling homes, gold, silver (they were de-monetized long ago)

 

[dinofelis]

In fact, Menger described money and the adoption of a commodity as money, as the commodity with the higher level of resellability, not purchasing power stability.
When people acquire money they do desire purchasing power stability, but implicitly they expect maximum resellability. When you spend money to acquire something, there no delay in people accepting it, like there could be with people selling homes, gold, silver (they were de-monetized long ago)

Absolutely.  Menger was, I think, the  first to realize this, and a precursor to von Mises.

However, I'd like to point out that whether real estate, gold and silver are money or not is depending on the time scale you're looking.  real estate is liquid on the multi-year scale.  Gold and silver are liquid on, say, a week's scale.

[Atdhe]

So money is exactly not what debt is: a fixed, wel-defined unescapable liability.  It is a flexible exchange and nobody is forced to accept it.

You mix what you think money should be or what Austrians believed money is with what money now and today really is.

Money is debt and even BTC economy that will be well different from economy of today will be based on debt and BTC or any other and better cryptocurrency will be the monetary base (which is probably for you the only real money). From the monetary base will be issued money through debt, like it was in 19th centrury when PRIVATE banks were issuing the money through debt directly (not indirectly lie today after central bank emission).

[painlord2k]

So money is exactly not what debt is: a fixed, wel-defined unescapable liability.  It is a flexible exchange and nobody is forced to accept it.

You mix what you think money should be or what Austrians believed money is with what money now and today really is.

Money is debt and even BTC economy that will be well different from economy of today will be based on debt and BTC or any other and better cryptocurrency will be the monetary base (which is probably for you the only real money). From the monetary base will be issued money through debt, like it was in 19th centrury when PRIVATE banks were issuing the money through debt directly (not indirectly lie today after central bank emission).

Money, real money, is a commodity. A good like others. Not debt. Even bitcoins are a commodity, just a different type of commodity from gold or salt.
What made gold and silver a better form of money than salt or furs is a set of specific intrinsic properties (not value): divisibility, fungibility, high value/weight value/volume ratio, durability, etc.
Currencies are SUBSTITUTES of real money. Currencies are debt, because they are created linked to a fixed/specific debt: 1 $ bill is convertible at any time for 1 $ gold coin.
Then, when the convertibility was eliminated (defaulting on the previous obligations), bills started to be created creating new debts: I give you some collateral valued X and you give me X bills and I give you back X+interests some time later. But the privilege of creating money is monopolized by a single entity called Central Bank. Any other entity doing the same is called forger.

The value of the bills is strictly linked to the restrain the Central bank have in printing new bills (and preventing other forgers from printing imitations).
In this way, the Central Bank is able to move wealth around giving the news debt/credit to selected friendly entities (other banks and governments) at low cost where the others can only obtain credit at high cost or can not at all.

Bitcoin is not credit or debt, when you exchange bitcoin for goods or services, you receive the bitcoins and the other party receive the goods or services. The exchange end there. There are no other obligations for both of you or other third parties. The expectation of the other party to be able, in the future, to exchange his bitcoins for other goods and services he want is not a debt or a credit of anyone. A motor car industry can have expectation to sell his goods in the future in exchange for a specific sum of $, but the public is not bound by this expectation.

[Atdhe]

Jesus f***** Christ.

Here it seems everyone is doing his own definitions. I have MA in macroeconomics btw. No, money is NOT commodity. Money is what people accept as money, period.

What you are talking about is monetary base and you have some false assumptions about it as well. If everything what you write was true, fiat money would never existed, yet they exist based on thin air.

So far BTC monetary base = BTC protocurrency [that is not yet currency]. In future, as Bitcoin will be more and more accepted it will look and behave more like fiat money, with some exceptions:

1. Monetary base would not be falsified, because it is impossible

2. The money that will be indeed created by debt again, will not be affected by central banks, but they will be issued by private Bitcoin banks and supply and demand of those "debt" money will determine the price of BTC. Of course there will be much more BTC than the 21 M in future, because it will be those debt money.

Guys, even when you hate recent currency system, you should really read something about it, before you comment about it.

[Erdogan]

Jesus f***** Christ.

Here it seems everyone is doing his own definitions. I have MA in macroeconomics btw. No, money is NOT commodity. Money is what people accept as money, period.

What you are talking about is monetary base and you have some false assumptions about it as well. If everything what you write was true, fiat money would never existed, yet they exist based on thin air.

So far BTC monetary base = BTC protocurrency [that is not yet currency]. In future, as Bitcoin will be more and more accepted it will look and behave more like fiat money, with some exceptions:

1. Monetary base would not be falsified, because it is impossible

2. The money that will be indeed created by debt again, will not be affected by central banks, but they will be issued by private Bitcoin banks and supply and demand of those "debt" money will determine the price of BTC. Of course there will be much more BTC than the 21 M in future, because it will be those debt money.

Guys, even when you hate recent currency system, you should really read something about it, before you comment about it.

You don't get far with that degree here.

I am aware of your point 2. With no central bank, with no government insurance of deposits, banks will be held in check by the market, and debt creation will be lower. How low - nobody knows.

The problem is not inherently the fiat money, but the central banks, mainly the fed, the deposit insurance, the spoils to the cronies and to the public.

[dinofelis]

You mix what you think money should be or what Austrians believed money is with what money now and today really is.
Money is debt and even BTC economy that will be well different from economy of today will be based on debt and BTC or any other and better cryptocurrency will be the monetary base (which is probably for you the only real money). From the monetary base will be issued money through debt, like it was in 19th centrury when PRIVATE banks were issuing the money through debt directly (not indirectly lie today after central bank emission).

I'm indeed mostly a follower of the Austrian School.  But I follow a school because a reasoning is sound, not as a religion.

The point is that you are exactly giving the argument that I use to show that money is not debt (but that debt is a form of money).
You seem to agree that what you call "base money" is NOT debt but a commodity.  That is sufficient to prove that money is not debt, given that there exists money that is not debt.
(the claim "money is debt" implies that every kind of money must be debt.  It is sufficient to find one counter example to that, to prove the claimn wrong, and you give it yourself).

However, and I underlined this: proofs of debt are also assets that can act as money.  It is true that the fiat system is largely, or almost solely, based upon such kinds of assets as monetary assets.  But their "money" function doesn't come from their "debt" type of asset.

I explained all this in this thread if you'd mind to read.

The point is that it is not the debt aspect that makes something money.  That's all.

[Atdhe]

Part of my family is from Austria, I studied economy at Austrian border. I read Austrians, I am well aware what you are telling to me and you pointed that out: Austrian school is full of weird freaks as the other schools.

It is totally one sided point of view on economy or money. If you were socialist, I would maybe take some parts of austrians to argue against you, but you have chosen another flag and you want to die for it. E.g. you write "the claim "money is debt" implies that every kind of money must be debt" -> pure nonsense. Only debt that is accepted as money is money. And in our economy all money aggregates above mB (->m1, m2, m3...), which are indeed debt, are accepted as money. Nothing changes with the fact that nobody knows what exactly the money is and how they behave.

Money is - above all - the symbol. If something can act as money, it becomes money.

From psychoanalytical point of view I take your notion of money as projection of your deep wish to win a battle over the ontological uncertainity. I understand that fear, because money and whole symbolic universe is something fascinating a causes fear. When I was in early 20's I was big fan of Austrians as well of course. I saw solution to every question, world finally made sense etc. Then this illusion started to crumble. I did not listen until then, so I know you will not as well.

[dinofelis]

E.g. you write "the claim "money is debt" implies that every kind of money must be debt" -> pure nonsense. Only debt that is accepted as money is money.

This has nothing to do with money, economics, or Austrians.

This has to do with logic. 

If you write: humans are mammals, that statement means: all humans are mammals.  It would be sufficient to find one human being that is actually a bird, to prove the statement "humans are mammals" wrong.  This is not pure nonsense but pure logic.

Also you make another error.   When it is said that "money is debt"  it never implies that all debt is money.  Indeed "humans are mammals" doesn't  imply that all mammals are humans.

Logically, there is an equivalent between the following sets:

A)
humans, mammals, males
the statement "humans are males" (no, there are females too)
the statement "males are humans" (no, there are male monkeys which are not humans)
the statement "humans are mammals" (yes)

B)
money, assets, debt
the statement "money is debt" (no, there is money which is not debt)
the statement "debt is money" (no, there is debt which is not accepted as money)
the statement "money are assets" (yes)

If logic is failing at such elementary level discussion is going to be difficult.

[dinofelis]

From psychoanalytical point of view I take your notion of money as projection of your deep wish to win a battle over the ontological uncertainity. I understand that fear, because money and whole symbolic universe is something fascinating a causes fear. When I was in early 20's I was big fan of Austrians as well of course. I saw solution to every question, world finally made sense etc. Then this illusion started to crumble. I did not listen until then, so I know you will not as well.

It is a strange statement to refuse quite a clear concept and definition of something, with the desire to mystify it somehow.
I have no problems with the concept of money, it has nothing mysterious about it, and the austrian inspired view on it is quite crystal clear and simple.  It can explain all aspects of money without difficulty.  That is not an huge claim: money is actually a rather simple concept.
When you try to interpret it in the wrong way, such as "money is debt" many things become obscure and you have to redefine concepts in order even to make the strange claims one comes then about even to make sense.  
You could just as well mystify something else, by saying something like "wood is food", and then go off on a tangent to try to keep that strange statement somehow meaningful.

No: if you take it that money is a speculative asset that is highly universally tradable, then you have your concept of money.  It can explain all economic properties of it without problems (the demand and offer, with its price setting, the fact that prices change and all that).  It doesn't mean that you can make good predictions, because of human action, which influences demand and offer in potentially untracable ways - like all demand and offer.  But there's no mystery left.

Proofs of debt are also assets, and in some cases, they can also become money.  The whole fiat system is based upon that kind of assets to make up money.  But gold for instance, isn't such an asset.  The claim "money is debt" (which is the kind of asset making up money in the fiat system) would be equivalently silly in the following: "money is metal".

If on top of that one confuses inclusion and equivalence, one would then argue that money is not metal because iron is not money :-)

[Atdhe]

Proofs of debt are also assets, and in some cases, they can also become money.  The whole fiat system is based upon that kind of assets to make up money.  But gold for instance, isn't such an asset.  The claim "money is debt" (which is the kind of asset making up money in the fiat system) would be equivalently silly in the following: "money is metal".

Yes, debts in some cases, can become money. And if money has to emerge in human symbolic system, debt must happen always first. The debt is necessary condition. The sufficent condition when debt becomes money is that any debt is widely accepted (this is why BTC is nt money yet).

The whole fiat money is in a way much more right than a system with precious metals for example, because it confuses people like you. Money has nothing to do with inner value. Money is just a symol that emerges from debt and mutual trust that debt will be paid off.

People have such nature that they need to create from mental symbols some real, concrete, materialistic symbols. This is why gold was good. But fiat money were proof that such symbol is notnecessary. Even when goverments were really fucking up monetary system, because the temptation for them is too high, we can easily see that the most successful economies of last decades were on full fiat. Yes, professional conspirators and Hayek will say, that the economies were the best in spite of the monetary system. I do not buy that. Fiat money was evolution in right way away from golden standard etc, because the concrete symbol is not necessary and economy pays for it too much.

You can take it as analogy of some believers in God or philosophy. If they fall into temptation to create something which symbolises the God or philosophyin this world, they can be well building churches whole their life and they do not have time to live. Other groups of people, who do not need such material symbols, can use resources in other way. This is an analogy that should be used.

Almost all economists are materialists rough as Marx. But human perception of reality is more complex. We impose symbolic values on things and one of the symbols is symbol of money, which are used to pay off the debts. Gold is just a gold, like iron is iron, sulphur is sulphur and salt is salt. Until we decide from some reason in very lengthy process that we all can observe with BTC now, that something (that can not be couterfeited) is money. But that "thing" is just a gunsmoke. It is not real even when there is some gold or whatever.

By the time Mises was born, there was unregulated supply of money at least in UK and US. Based on precious metal standards banks were emitting money. Was it a gold? No way. It were notes like we know until now, only there was some promise that those notes are backed by gold etc. Were all the money circulating by that era backed by the gold? No way. It was the same "ponzi scheme" as by now. Money were created by debt and money was the debt and promise, that for every note there will be some golden bullion. But it was not true even 150 yrs ago. Banks were creating loans based on economic cycles. Everyone was told he can go to bank and get his golden nugget for the notes, but only small fraction was covered. And it was not needed of course, because almost nobody went to the bank.

What came after golden standard was evolution, where even monetary base was freed from the golden nonsense. Even the core does not need to be materialised and it can be trust in government or now trust in algo. But it has nothing to do with money, which need the debt to exist, so the money as symbol, has some justification to exist as well. If there is no economy, if there is no inter-time exchange, there is no need for money and money does not exist. Golden bullion is there useless and Satoshi is autistic idiot instead of genius.

Everyone hates Keynes and every austrian follower thinks that Keynes was retarded, because what he said and did to money was obvious nonsense. I was sure in late teens and early 20's about it. Keynes was brilliant because he saw more than economists; he really understood human behavior with all mistakes we do and can not help ourselves. Bretton-Wood was huge step forward. Bitcoin will be next step to even higher degree of virtualisation of the symbol of debt, while the money will have even better technical qualities than fiat money (which still were great invention).

[Atdhe]

E.g. you write "the claim "money is debt" implies that every kind of money must be debt" -> pure nonsense. Only debt that is accepted as money is money.

This has nothing to do with money, economics, or Austrians.

This has to do with logic. 

If you write: humans are mammals, that statement means: all humans are mammals.  It would be sufficient to find one human being that is actually a bird, to prove the statement "humans are mammals" wrong.  This is not pure nonsense but pure logic.

Also you make another error.   When it is said that "money is debt"  it never implies that all debt is money.  Indeed "humans are mammals" doesn't  imply that all mammals are humans.

Logically, there is an equivalent between the following sets:

A)
humans, mammals, males
the statement "humans are males" (no, there are females too)
the statement "males are humans" (no, there are male monkeys which are not humans)
the statement "humans are mammals" (yes)

B)
money, assets, debt
the statement "money is debt" (no, there is money which is not debt)
the statement "debt is money" (no, there is debt which is not accepted as money)
the statement "money are assets" (yes)

If logic is failing at such elementary level discussion is going to be difficult.

I have never said (or meant) all debt is money. I mean all money is debt and debt is necessary for money to exist. All I can see is that you do not understand me, because you keep drawing me some simple models of logic which you believe I fail to pass. Problem is that your indoctrination does not allow you to read what I am saying. I keep saying to you I was at the same situation so I undrstand your point when I am going back in time (I would like to tell back in time when I was total idiot, but it would be offensive for you, but I really feel ashamed how stupid and arrogant I was the 15+ yrs ago, while I was telling the same things you tell me now to few patient people who maybe commited suicide from desperation

[dinofelis]

I have never said (or meant) all debt is money.

Nor did I.  But you seemed to argue against it with your phrase:
"E.g. you write "the claim "money is debt" implies that every kind of money must be debt" -> pure nonsense. Only debt that is accepted as money is money."


The second phrase "Only debt that is accepted as money is money." only makes sense as a counter argument if the statement "all debt is money" would have been made, which I never made (nor did you I think).

The first phrase "money is debt" LOGICALLY means "all money is debt" which is obviously wrong.

Now if not all money is debt (and not all money is), then debt and money are separate notions.

I fully agree that debt proofs are assets which in some cases can become money.  
But there are also assets which are, or have been, money, and which are not debt.

And we have gone in a circle.

[dinofelis]

I mean all money is debt and debt is necessary for money to exist.

Which is obviously historically wrong, as several kinds of money have existed (cows, shells, gold....) which were not debt, and as base money is not debt in several cases.

All I can see is that you do not understand me, because you keep drawing me some simple models of logic which you believe I fail to pass.

Which is quite obvious, and has nothing to do with money or economics.

I keep saying to you I was at the same situation so I undrstand your point when I am going back in time (I would like to tell back in time when I was total idiot, but it would be offensive for you, but I really feel ashamed how stupid and arrogant I was the 15+ yrs ago, while I was telling the same things you tell me now to few patient people who maybe commited suicide from desperation

As long as your arguments do not make logical sense, and your definitions are not clearly stated, and your starting hypotheses are not clearly stated using the first two elements, your arguments are not going to make much impression on me.
As I think I have a quite clear view on what is money, a view which doesn't seem to pose any particular problem, the only way to influence my view is to confront me with an argument that makes logical sense.  Until now it doesn't seem to be.

You state that the implication "money is debt implies that all money is debt" is nonsense, why it is a tautology.  You give yourself examples of (base) money that is not debt while maintaining that all money is debt.  And you seem not to want to define clearly what you understand under the word "debt" as different from the concept of "property". 
You seem to use as argument against "not all money is debt" a statement that proves that not all debt is money, which has no logical relationship to the former statement.

So I'm at loss trying to find any argumentation in your posts that stands any test of logic.

Again: debt can be money in some circumstances.  I do not deny this.  But I maintain that money is is an asset (which can be a debt certificate).  And what makes that asset "money" has nothing particularly to do with the concept of debt, for two reasons:

- not all debt is money
- not all money is debt.

[dinofelis]

Yes, debts in some cases, can become money. And if money has to emerge in human symbolic system, debt must happen always first. The debt is necessary condition. The sufficent condition when debt becomes money is that any debt is widely accepted (this is why BTC is nt money yet).

I don't know what you mean by "human symbolic system".  Maybe you can give a clear definition of that notion.  

If you just mean that it is generally accepted, then what I define as money is just as good: that is the speculative aspect of money.

The whole fiat money is in a way much more right than a system with precious metals for example, because it confuses people like you. Money has nothing to do with inner value. Money is just a symol that emerges from debt and mutual trust that debt will be paid off.

But I'm not talking at all about "inner value" and in that respect I also think the Austrians (*) were too restrictive.  Assets which have no intrinsic (that is, usage) value can be money, such as fiat, or bitcoin.  The monetary aspect of an asset has nothing to do with its intrinsic value.  If you would have read my posts here, you would know that I say that too.

But I've given sufficient examples that indicate that the monetary aspect of an asset is separate from its eventual debt aspect, and the case of doing the dishes and the girlfriend was a perfect illustration of that.

People have such nature that they need to create from mental symbols some real, concrete, materialistic symbols. This is why gold was good. But fiat money were proof that such symbol is notnecessary. Even when goverments were really fucking up monetary system, because the temptation for them is too high, we can easily see that the most successful economies of last decades were on full fiat. Yes, professional conspirators and Hayek will say, that the economies were the best in spite of the monetary system. I do not buy that. Fiat money was evolution in right way away from golden standard etc, because the concrete symbol is not necessary and economy pays for it too much.

Here, you are arguing that money mustn't be assets that have any intrinsic value.  But I agree with that.  In fact, it even goes AGAINST "money is debt", because debt has an intrinsic value, namely the goods and services due, which are clearly defined.

[ZephramC]

OK. Let's try different angle. Imagine this situation:
0.) We have an island with small community (~30 people). There is no money, there are no debts.
1.) People exchange things for things,  services for things, services for services ... maybe even such abstract concepts like "personal free time", "respect", "friendship", "self-confidence", "conscience" are exchanged one for other. ... This is (generalized) barter system.
2.) Someone finds good and tasty peanuts in small isolated (unexplored, unclaimed, difficult to access) place within the island. Peanuts are nutritious and tasty, therefore they are useful, they are beneficial. No debt was needed to create them or bring them to people.
3.) Most of the people (not all of them, not always, not immediately) start to accept the peanuts as means of exchange. So they accept them not because they want to eat them, but because they believe that someone in the future will also accept them.

Now... If you say that all money is debt or that creation of money requires debt then you either:
- do not consider above-mentioned peanuts as money
- can not imagine system in step 1) working without debts
- believe that there have to be (political) system that guarantees and enforces (at least partial) acceptance of peanuts and call peoples responsibility and duty to abide such claims as "being in debt".

Am I right?