From Goldsmiths to Bankers, from Money to Currency, 6
This said for sake of conceptual clarity on basic mechanisms, in actual fact the evolution of both banking and ambiguous money occurred in a more haphazard and scattered way in terms of space, time and progression that, for sake of the same conceptual clarity, I would summarize in this manner:
In pre−money barter phases the choice of certain reference goods as media of payment entails the establishment of storehouses, entrusted with ensuring the quality of these goods by rejecting those below the minimum requirements, and thus building up confidence in them as media of payment. Such storehouses get appointed of an increasing amount of issuing power, in the form of receipts that become IOUs (I Owe You), not only backed up by goods but also denominated in goods as their unit of measure. These goods incorporate intrinsic value, and the shift towards fiat money will begin only after the IOUs backed up by them that will begin to circulate in lieu of them will exceed the actual goods they supposedly ought to be redeemed in. In coined money phases, coined money adopted as medium of payment incorporates “intrinsic” value, too; the shift towards fiat money will take the form of clipping of coins or whatever overt or covert form of cheating with their supposed contents.
Media of payment being vital like blood for a living organism, their scarcity is a stop to survival, therefore on one hand both society and its governing bodies have their expansion – in ratio with the existing goods – among their inherent aims and duties, while on the other hand suppressive, potential trouble source, dishonest, stupid, ignorant or hostile individuals or groups have their shrinkage among theirs, in order to choke society to either exploit it or just murder it and that’s that. A case in point being the origin of the “American Dream” that is, easy opportunities for everyone: at the heart of it is the plenty of credit and media of payment produced by the established power taking it upon itself the historical advance of organization of credit, carried out by acting as first lender to society, and by doing so generously and with debt−free money, as opposed to British suppression perpetrated by enforced debt money and money scarcity.
