The funny thing About Money
and the biggest scam in human history
No, I am not going to talk about why making money is such a materialistic thing or why money is root cause of all evil (Money is actually root cause of lot of great things actually .. which we will discuss later )
The most interesting thing about money is, it's not natural extension of our sensory experience, ie it doesn't taste good or smell great. yet its one of those super important things in a modern society.
The main quality of money is determined by not its intrinsic value but by how good it can be an exchange of value.
So the dollars or pounds in your hands has value because other people are ready to accept it for goods and services. Thats interesting right , even though you can’t eat the papers you hold, you can hand them over to a waiter and have the food delivered.
Now why does your waiter take those bills even though he cant eat them ? Again he hands them over to a merchant to buy groceries and the chain continues..
This is what is called as Money illusion, ie Money is something that other people consider as valuable even though it doesn’t have value to yourself right now
So as long as majority believe in something as money, it becomes money.
Money the most powerful force on earth, the force that can destroy countries and build countries.
Money, the object of desire, that lets one men kill another for it ( even a word coined for it .. mercenary )
The funny thing about money is it doesnt have REAL value and if something has REAL value it cant be a great money, that's the irony of it
Read that once again, if something has value like food or industrial metals or whatever cant be the best money because they have OTHER uses. So perfect money should not be used for anything but for the purpose of money. and should be awesome at these four qualities.
Those qualities are Scarcity , Divisibility , durability and fungibility.
For this same reason, money has changed forms throughout history , starting from sea-shells to salt and gold. Gold has held the unique title of ultimate store of value for the longest time in recorded human history, because it has some of the most important qualities of sound money.
However as the modern banking system started, they have started issuing paper money or IOUs for the gold you deposit and these IOUs started gaining traction as more and more banks started issuing them( some people say the weight of carrying gold and silver pushed them toward paper money but thats not true) , the paper currency became so prevalent that people stopped believing that gold is the underlying money and so many fiat currencies like dollar , pound have become to dominate the marketplace instead of good old gold.
The funny thing in the school history they about wars, leaders blah blah but rarely talk about the history of money and how paper currency replaced the real money which is gold.
One of those very interesting videos which talk about this