[tensor_rank_0]

money is a medium of exchange, a unit of account, and a store of value. a loan is an obligation. its a value with negative valence.

> So what happened when the risk is the lowest possible? The interest rates goes to zero or even negative. Makes sense?

the risk premium is not the same as the interest paid the lender by the debtor for the privilege of having something now and paying it back later. in this case, the interest rate is the price of money, denominated in money, arbitraged over time.

look at it another way, why would anyone make a loan if they didn't stand to gain anything? why would I loan you $5 in order to get $5 back at a later date? I already have $5. now if you give me $5.05 back tomorrow, then I have gained 1% for my sacrifice of letting you hold the money for a day.

[simo7]

> why would anyone make a loan if they didn't stand to gain anything?

Exactly. That's precisely the question.

If you lend money 1) you bear the risk of not seeing you're money back 2) you're not able to spend that money during the loan period.

Even if you don't care about risk and don't want to spend that money 3) you'd still be greedy enough to want something back, right?

So let's imagine all 3 points disappear:

1) There is practically no default risk. 2) You could still purchase something by exchanging your credit with goods (and everybody would accept for its nominal value without any discount). 3) This credit certificate you hold in your hands turns out to be very convenient to use. It's so much easier to trade and everybody accepts it and trusts it, why not to use this as "money"? And why to ask something back when it's already providing me more utility then "money" with no disadvantages?

So in reality you have a lot of "loans" that end up being called quasi-money exactly for the reasons above.

Some countries issue government-bonds with negative interest rates, not only because they are considered very safe investments but also because banks use those type of bonds for their operations making them convenient to hold.

Like I've said, it's a quantitative difference not a qualitative one. Money = loan with negative interest rate.

[tensor_rank_0]

money doesn't have a yield, so it can't have an interest rate. also consider that the interest rate is denominated in a ratio of currency units. its nonsensical to reify currency as a special case of a loan of itself.

[simo7]

If it helps read here: https://en.wikipedia.org/wiki/Near_money

Unfortunately this "nonsense" is the explanation that any economist would give you.

Maybe you can be the first one to propose a revolutionary alternative theory, but I haven't read it :)

[tensor_rank_0]

> If it helps read here:

that doesn't support your novel assertion.

> Unfortunately this "nonsense" is the explanation that any economist would give you.

lots of people running around hn espousing their own particular viewpoint as mainstream econ. are you guys working together or is it just a few guys attempting to take advantage on a non-econ crowd?

> Maybe you can be the first one to propose a revolutionary alternative theory, but I haven't read it :)

well you're obviously not very well read if you think commodity money is a revolutionary alternative theory :). I'd suggest starting with introductory econ textbooks and setting your own prejudices aside until you're better informed.