ABSTRACT
This chapter explains about Chartalism and Fiat money. None of the history we have examined so far supports the view that commodity money is or ever has been a medium of exchange. If money as an accounting unit depends upon a legal authority, perhaps it is to legal authority we should turn in seeking an explanation for our last mystery about money. In this chapter Wray explains: anyone can create money by issuing an IOU denominated in the social unit of account. The problem is to get it accepted, to get someone to hold one's IOU. This allows us to frame the final mystery in the following way. If one seeks to purchase something from us by using IOU, it is their choice whether or not to take the deal; it will depend on how much they trust me, assuming we don't run a protection racket.
