Money: Difference between revisions

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 ===Whoever holds it holds it outright. No exceptions.===
-Transfer of [[cash]] to another person<ref>This is called “[[payment]]”, not “[[delivery]]”, as those who have had to dally with [[Physical settlement|physical]] and [[cash settlement]] wording will, to their chagrin, know.</ref> with the expectation of its return fundamentally, ''necessarily'', creates '''[[indebtedness]]'''. By transferring cash to someone else in expectation of its return, you convert your own ''holding'' of that abstract token to a claim on the estate of the person to whom you transferred it for [[repayment]] of that [[debt]]. There can be no kind of [[bailment]] or [[custody]] arrangement over cash.
+Transfer of [[cash]] to another person<ref>This is called “[[payment]]”, not “[[delivery]]”, as those who have had to dally with [[Physical settlement|physical]] and [[cash settlement]] wording will, to their chagrin, know.</ref> with the expectation of its return fundamentally, ''necessarily'', creates '''[[indebtedness]]'''. By transferring cash to someone else in expectation of its return, you convert your own ''holding of that abstract token'' into ''a claim on the estate of the person to whom you transferred it for [[repayment]] of that [[debt]]''. There can be no kind of [[bailment]] or [[custody]] arrangement over cash.
-This isn’t just an English law point. It is not a function of the {{t|CASS}} rules. It is fundamental to the nature of [[cash]] in any place, under any law. It dates back to the Code of Hammurabi. Anything which doesn’t automatically create indebtedness ''is not [[money]]''.
+This isn’t just an English law point. It is not a function of the {{t|CASS}} rules. It is fundamental to the nature of [[cash]] in any place, under any law. It dates back to the Code of Hammurabi.
-Therefore, you cannot eliminate [[credit exposure]] to a person who holds money you have given them unless they physically and permanently put it aside – that is, they take an equal amount of cash out of circulation and put in a vault or something – ''and'' the [[debt]] represented by that cash payment benefits from some kind of statutory protection against claims from other [[creditor]]s. So the [[cash]] not only has to be physically present in full, it also has to be preferred. Even this only amounts to a statutory preference as against the holder which defeats claims of lower-ranking creditors.
+An instrument whose deposit doesn’t automatically create [[indebtedness]] ''is not [[money]]''.
+Therefore, you cannot eliminate [[credit exposure]] to a person who holds “your” [[money]]. If someone else holds it, it isn’t ''your'' [[money]]. That person owes you an equivalent sum. Event if she has physically and permanently put it aside – that is, she has taken an equal amount of cash out of circulation and put in a vault or something – ''and'' the [[debt]] represented by that cash payment benefits from some kind of statutory protection against claims from other [[creditor]]s there is still some basic credit risk. Even this only amounts to a statutory preference as against the holder which defeats claims of lower-ranking creditors.
-If the receiver is entitled to use cash in its operations, as surely it must be, the debt it represents ''must'' be part of its insolvency estate. All “segregation” can possibly mean is that a protected creditor has a better claim to repayment of its debt that any other creditor for the payment of the debt due to it. This is totally different to non-cash, where the custodian never has legal title to the asset and it never falls into its insolvency estate.
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