Modern Money Mechanics, by the Chicago Fed

Recall my blog earlier today <click here> where I rhetorically asked "what is riskless return?", and more importantly, "what is money?"  With central bankers' machinations and manipulation of financial markets, these questions are becoming very pertinent and have profound implications on assets and wealth.  Price discovery mechanisms have become distorted beyond recognition as a result.

Here is a workbook by the Chicago Federal Reserve Bank itself attempting to answer these esoteric, but actually impactful questions, released in 1961.

http://www.scribd.com/doc/57392495/Modern-Money-Mechanics

“In the United States neither paper currency nor deposits have value as commodities. Intrinsically, a dollar bill is just a piece of paper, deposits merely book entries. Coins do have some intrinsic value as metal, but generally far less than their face value. What, then, makes these instruments - checks, paper money, and coins - acceptable at face value in payment of all debts and for other monetary uses? Mainly, it is the confidence people have that they will be able to exchange such money for other financial assets and for real goods and services whenever they choose to do so."