Currency as Debt: A New Theory of Money
An Introduction
Part 2 of 9
 

What are the system boundaries of this new theory of money? New models typically start as a null system; that is, a system with a boundary but containing no elements or rules either inside or outside the system. In short, creating a new model always starts from scratch.

Null systems are rarely useful, likewise for a new theory of money. Some elements and rules are needed.

In modern usage the words money and currency are used interchangeably. The classical definition of money and currency is anything customarily used as a medium of exchange and a measure of value; an accounting unit for price comparison of goods and services; a store of value such as savings; a standard of deferred payment; metal, such as gold or silver, coined or stamped, and issued as a medium of exchange; any written or stamped promise or certificate, as a bank note, current as a means of payment.

Those definitions are elements from a previously defined system. At best those “definitions” do not define currency but only describe the effects of currency. A new system requires new definitions:

Money: A psychological creation; a concept; the mental image of that which is used as a medium of exchange.

Currency: That which circulates as a medium of exchange; anything that is in immediate, continuous and widespread use as money.

In other words, nobody can physically touch money, no more than they can touch a pound or an inch or a second. Money is conceptual in nature. Currency, however, the thing that represents money, can be touched. Just as a person can touch a scale to measure weight, a ruler to measure distance, or a clock to measure time.