Is our Money robbing from us?

$1.00 in 1940 had the same buying power as $16.89 in 2016. The first thing that might come to mind to help explain this is ‘’Inflation’’. Oh yes, lets always blame it on Inflation. But what is Inflation according to experts? Economists choose to explain ‘’inflation’’ as a sustained increase in the general price level of goods and services in an economy over a period of time resulting in a loss of value of the currency. Think of price as a sponge placed in a pool of water, water being the currency supply. When you increase the water level the sponge becomes bigger, that is inflation.  The big word here is ‘’Currency’’.  You often notice how we are afraid to call our paper currencies ‘’Money’’.

The value of Money

Perhaps money does not possess all the characteristics of Money. Money is meant to serve as a store of value, a unit of account and as a medium of exchange. Approximately 5000 years ago the Egyptian started using Gold and Silver as their predominant form of currency but it was not yet money; the pieces of gold and silver they were using were of odd sizes and purity, so it was still not interchangeable where each unit is the same as the next. This meant that nothing really had a price yet. Trade was still a guessing game when it came to the exchange of values. The difficulty in today’s economies is that we do not know the difference between Currency and Money. A Currency is a medium of exchange, a unit of account, which is portable, durable, divisible and fungible. However, Money is all of those things plus a store of value over a long period of time. Unfortunately what we refer to as money is actually a currency as it does not possess the aspect of value storage.  This is so because it’s easily affected by what economists today call ”quantitative easing” which is a fancy word to mean the liberty governments have to print more money. This means the value can never be stored in future. The result of this is that your hard work is constantly getting robbed daily. Fiat Currencies are currencies based on confidence, which means they are not backed by Gold or Silver. The troubling news is that history tells us that over time fiat currencies eventually attain a value of Zero.  Today our economies run on fiat currencies which

The difficulty in today’s economies is that we do not know the difference between Currency and Money. A Currency is a medium of exchange, a unit of account, which is portable, durable, divisible and fungible. However, Money is all of those things plus a store of value over a long period of time. Unfortunately what we refer to as money is actually a currency as it does not possess the aspect of value storage.  This is so because it’s easily affected by what economists today call ”quantitative easing” which is a fancy word to mean the liberty governments have to print more money. This means the value can never be stored in future. The result of this is that your hard work is constantly getting robbed daily. Fiat Currencies are currencies based on confidence, which means they are not backed by Gold or Silver. The troubling news is that history tells us that over time fiat currencies eventually attain a value of Zero.  Today our economies run on fiat currencies which

A Currency is a medium of exchange, a unit of account, which is portable, durable, divisible and fungible. However, Money is all of those things plus a store of value over a long period of time. Unfortunately what we refer to as money is actually a currency as it does not possess the aspect of value storage.  This is so because it’s easily affected by what economists today call ”quantitative easing” which is a fancy word to mean the liberty governments have to print more money. This means the value can never be stored in future. The result of this is that your hard work is constantly getting robbed daily. Fiat Currencies are currencies based on confidence, which means they are not backed by Gold or Silver. The troubling news is that history tells us that over time fiat currencies eventually attain a value of Zero.  Today our economies run on fiat currencies which

This means the value can never be stored in future. The result of this is that your hard work is constantly getting robbed daily. Fiat Currencies are currencies based on confidence, which means they are not backed by Gold or Silver. The troubling news is that history tells us that over time fiat currencies eventually attain a value of Zero.  Today our economies run on fiat currencies which leave us vulnerable at all times; we cannot store our hard work for the future.

Before World War 1 most US dollars were backed by Gold as Gold had the aspect of storing value. The trouble with Gold is that government cannot print it hence governments cannot have much influence over its population. Using it would restrain governments from spending beyond their means. As populations continue to cry over income inequality we often resort to either printing more money to boost spending or cutting taxes yet the big problem might actually be us as a society refusing to distinguish between Money and currency.

By Arnold Kisakye.

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