Is Credit Card Debt an expansion of the Money Supply?

[Steven Douglas]

I ask how can an IOU - something created that is referenced by money be money.

You mean like Gold and Silver Certificates back in the day? Greenbacks when they were issued? State issued currency notes? Those were all debt instruments once upon a time -- IOU's, all of which were nothing but references to real money, which debt instruments were counted by most people as money.

And what, exactly, does "referenced by money" mean to you, anyway? Clumsy syntax, how can a thing be referenced "by" money? I assume you mean "is a reference to money" but you'll have to clarify on that point.

By all means follow the money - whatever you consider to be real. But when you follow the genesis of that money, your theory is self-conflicting. The paper no-longer-debt notes that you now consider money, given their self-reference and irredeemability in anything but more of the same note, were once only debt notes, and they were not self-referencing; they were in fact multiple references issued against the same specie, or what was then considered the only real money. At some point these debt instruments, these IOU's, which were not money themselves when they were issued, but rather "PAYABLE IN LAWFUL MONEY" of that time, became the only thing you now count as "real money". At what point did that come to pass? When did these IOU's become real money? Was it at the point that they became self-referencing? Did later welching by banks and government on all these debts magically transform these IOU's into a new kind of real money? In other words, is that all it takes to create "real money" in your mind - make it self-referencing?