Under current accounting practices, this income is (incorrectly) unreported in the income statement of the central bank and instead (incorrectly) set aside under the central bank’s “liabilities.” The proceeds from money sales represent a form of income, specifically a “revenue income.” 2 Issuing legal tender thus generates income to the issuer. Issuing legal tender involves transactions whereby money is sold in exchange for other assets (even when it is exchanged against credit claims under lending contracts). Therefore, although these monies are still allocated as debt in public finance statistics and central bank financial statements, they are not debt in the sense of carrying obligations that imply creditor rights. Finally, the reserve deposits held by commercial banks and national treasuries at central banks are today delinked from obligations of conversion into commodities or third-party liabilities. Convertibility of banknotes was suspended long ago, and the abandonment of the gold exchange standard (about half a century ago) marked the demise of “debt” banknotes even at the international level. Coins have lost most of their relevance and largely been replaced by paper money. Today, convertibility has all but disappeared for the three monies. All three species of money thus originated true debt obligations that were legally binding on their issuers. A similar obligation committed central banks to their reserve liabilities issued to commercial banks.
Later, banknotes gave holders the right to claim conversion into silver or gold. Once upon a time, sovereigns guaranteed that the coins issued contained specific amounts of precious metals. Yet, for the state, which obligation derives from the rights entertained by the holders of coins? Or, for a central bank, which obligation derives from the rights entertained by the holders of banknotes or the banks holding reserves? Debt involves an obligation between lender and borrower as contracting parties. Similarly, banknotes issued by central banks and central bank reserves are accounted for as central bank debt to their holders.Īlthough the law says that money is “debt,” a correct application of the general principles of accounting raises doubts about such a conception of money.
P4 wears a similar outfit to P2, but the white parts are now black, similar to P3. P3 wears a similar outfit to P1, but the white parts are now black. She wears a white dress with white boots.
He wears a white hat with a white shirt, pants, and shoes. The routine is performed by 2 men and women.
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