The nature of money has been debated with as much fervour by economists as has the nature of God by theologians. Both concepts are abstract. Everyone can identify commodities such as copper, silver, gold, platinum, coffee, cocoa and sugar. We can visualise them in physical form. But what about a US dollar bank deposit? Its possession gives the owner the right to acquire goods. Without the back-up of a legal contract between the depositor and his bank the deposit would be worth no more than the paper on which his account statement is rendered.
KeywordsInterest Rate Real Exchange Rate Canadian Dollar Swiss Franc Forward Market
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