Late last night I released Part 6 of my Understanding Money & Banking video series. Titled "Consent, Coercion & Legal Tender", it deals only with currency (as opposed to credit). In particular it focusses one of the key differences between paper bank notes and gold/silver coins: the source of the value of each.

Subtopics include:

• consensual trade and gold coins;
• how paper is turned into money;
• the nature of "legal tender";
• legal tender and the role of government; and
• agreement vs. consent.

I strongly recommend to everyone - including economics majors - that they watch the series in order, starting with episode 1, rather than just jump directly into episode 6. The reason: my conceptions, descriptions and terminology may differ considerably from that which you have read in economics texts. This is not to suggest that the economic texts “have it wrong”, per se. However, it has been my observation that many works of economics betray an ignorance of the nature of money, of banking, and of the mechanics of basic financial transactions such as the making of a deposit, the borrowing of money, etc. Hopefully, these videos will provide some useful insights to non-economists and economists alike, whether amateur or professional.

For those who have already watched episodes 1 through 5, jump right in (note: the video will be available world-wide within a day or two, if you cannot access it yet in your area…youtube videos take a while to propagate around the globe):

Paul McKeever’s “Understanding Money and Banking”, Episode 6:
Consent, Coercion & Legal Tender