Editor:

Money. It is getting difficult to figure out what it is.

There are two kinds of money: Commodity and Fiat.

Gold and silver are commodities. When they are used for money, that money is called commodity money.

Fiat means an arbitrary order or decree. When a government states that something must be used for money, regardless of what that something is, that money is called fiat money.

The "Silver Certificate" was a hybrid of the two. It was used in the U.S. from 1868 to 1964. On it was printed "This certifies that there is on deposit in the treasury of the United States of America One Dollar in Silver payable to the bearer on demand." In other words, any individual with a One Dollar Silver Certificate could get five dollars worth of silver from the U.S. Treasury.

The "Silver Certificate" kept the Federal government from printing fiat money unless they had silver to back it up.

The "Federal Reserve Note," is used today. On it is printed "Federal Reserve Note The United States of America One Dollar," which according to the U.S. Treasury official Web site, http://www.ustreas.gov, "The notes have no value for themselves, but for what they will buy."

The "Federal Reserve Note" is clearly fiat money. It is money only because a Federal Government fiat (order) says it is. The paper on which a $1 bill is printed is no more valuable than the paper on which a $100 bill is printed. Both are Federal Reserve Notes, both

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are fiat money, both are paper.

Fiat money was tried in Germany by the Weimar Republic, 1918-1923. In 1918, one fiat Mark, (the German dollar) was worth one ounce of gold. In 1923, the year Adolph Hitler wrote "Mein Kampf," 1 trillion fiat marks were required to buy one ounce of gold. Because the government could not print fiat (paper) money fast enough, it decided to print only one side of a bill.

Economists classify U.S. fiat money as M1, M2 and M3. M3 is the total of all money including all that Treasury has printed. As of March 29, 2006, according to the official U.S. Federal Reserve Web site, http://www.federalreserve.gov, "M3 is no longer published or revealed to the public."

The speed with which the Federal Government is printing fiat money to pay for "change," may be changing the meaning of money.

V.A. HAMMONS

Shiprock