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I'm not fixing the currency to anything because neither a commodity nor a unit of currency is a unit of account. A unit of account is a standard unit of measure for value by reference to which commodities, currencies and other value may be exchanged.

If I accept your IOU in exchange for my widget, and Mig accepts it from me in exchange for his gizmo and ARG accepts it from Mig in exchange for a nice lunch and ARG finally presents it to you in exchange for mowing his lawn then all of us will have made a value judgement in respect of your IOU by reference to a unit of account, in this case the abstract $.

Our value judgement will probably have been based upon our judgement of your capacity and willingness to provide goods and services to fulfil your obligations.

In other words, how good your credit is.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Sat Sep 7th, 2013 at 05:02:48 PM EST
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