1). Investopedia, money Any form of currency issued by the United States Treasury and not the Federal Reserve System, including gold and silver coins, Treasury notes, and Treasury bonds. Lawful money stands in contrast to fiat money, to which the government assigns value although it has no intrinsic value of its own and is not backed by reserves. Fiat money includes legal tender such as paper money, checks, drafts and bank notes. Oddly enough, the dollar bills that we carry around in our wallets are not considered lawful money. The notation on the bottom of a U.S. dollar bill reads Legal Tender for All Debts, Public and Private, and is issued by the U.S. Federal Reserve, not the U.S. Treasury. Legal tender can be exchanged for an equivalent amount of lawful money, but effects such as inflation can change the value of fiat money. Lawful money is said to be the most direct form of ownership, but for purposes of practicality it has little use in direct transactions between parties anymore. 2). Investopedia, Fiat Money Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat money is derived from the relationship between supply and demand rather than the value of the material that the money is made of. Historically, most currencies were based on physical commodities such as gold or silver, but fiat money is based solely on faith. Fiat is the Latin word for it shall be. 19). 31 USC 5103, Legal Tender: United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues. Foreign gold or silver coins are not legal tender for debts. SEE U.S. Government Printing Office Style Manual 2008, 8.20. [Remember - contract - law of boxes takes this out of the instrument.) 3). The American Heritage® Dictionary of the English Language, Fourth Edition copyright ©2000, Fiat Money Legal tender, especially paper currency, authorized by a government but not based on or convertible into gold or silver.
Posted on: Sat, 10 Jan 2015 20:12:46 +0000
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