Real Bills and Gold

The Daily Bell published an interview with Dr. Lawrence H. White, Professor of Economics, George Mason University, on October 24, 2010. One of the questions the interviewer asked was this: "Please comment on real bills and how they work." In his answer Professor White gave the following example. Joe the Baker buys flour from Bob the Miller and gives him a bill promising to pay $1000 in 90 days. There are several problems with this description. In actual fact it is not Joe who issues the bill