What is Money?

Think of this as Volume 16, Number 37 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.

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On my new beat, at Seeking Alpha and TheStreet.Com, people talk about money all the time.

Money is, in fact, the great mystery of my working life. What is it?

Is gold money? Is a dollar money? What makes them money?

What makes them money is that they're a store of value people understand and accept. There's an assumption that if the world comes crashing down tomorrow people with gold will have money but people with paper won't.

I no longer think that's right, because the only value gold can store is excess value, and if there's no excess value to store it's not money.