From: "Amanda Walker" <amanda@intercon.com> Hmm. I had thought about using "valuable," but that seemed too ambiguous. "Negotiable" maybe? The standard word for something that is worth something is "value". If I sell you a promissory note, I exchange value for a note. That value can be in the form of cash, money on deposit, or even other notes. Negotiable means something else entirely. A negotiable instrument is an instrument that can be transferred with certain protections over and above the transfer of a normal contractual obligations. The requisites for negotiability are, basically, those that make the instrument suitable for sale in a secondary market. The instrument must be in writing (not oral). It must be signed. It must contain an unconditional promise or an order for a particular sum of money and must contain to other promises, orders, etc. It must be payable to order or to bearer. The exact details may be found in your standard commercial paper review guide.
Sometimes currency represents a fiat value, as with today's greenbacks.
It's not entirely a fiat value; in effect, it's backed by the strength of the economy. Backing specifically refers to the relationship between the currency and the issuer of the currency. A fiat currency means that the government created the currency by fiat, i.e. out of the blue. A dollar may derive value from the underlying economy, but it is not backed by the economy, since the economy is not an entity. The difference between a ruble and a dollar was not the fiat value (they were the same, as I remember), but in the fact that it was a lot easier to exchange dollars for real assets. Both rubles and dollars are fiat currencies, yes. The dollar is a relatively well managed currency and the ruble was not. Therefore the dollar was in greater demand than the ruble, and hence easier to use. The difference is entirely in degree. For the record, I think that going off the gold standard was a bad idea, but growing up in the days of double-digit inflation probably gave me a biased opinion of floating currency. Well, when you finance a war with an inflating fiat currency, that leads to price increases. Inflation is a tax which the government does not need the IRS to collect. Thankfully the foreign exchange markets now quickly penalize any country that mismanages its currency supply. While it has been somewhat eroded since the start of the Drug War, dollars are still exchangable for real assets, even though the government is no longer backing them directly. The USA gov't, howeve, is backing the dollar still; it's just not backing the dollar with specie (gold and silver metal). The reason that Confederate dollars are no longer valuable as money is that the Confederate government no longer exists. A fiat currency is backed by several properties of active governments: legal tender laws, income taxes paid in the national currency, procurements, etc.
What currency do Visa or Master Card issue, perchance?
Little plastic tokens that are accepted more places than the government's paper and metal ones. If it quacks like a duck... A credit card is not a currency. It is a means of payment. Not all means of payment are accomplished through currency. One does not say, for example, that checks are a currency merely because I can pay for things with them. Eric