The Basics of Money

The movie zeitgeist has a great interpretation of a piece of the story illustrating the background to the US banking system, the Federal Reserve, and the influence of the few families that actually control the monetary systems for their own personal benefits.

The importance behind the information in this video are the angles in perception the makers convey, including the structure of the printing and lending system of the Federal Reserve to print currency and charge an interest in the currency thus creating a self sufficient payment system for the users of the currency. Why is this important? Because money as we see it has no apparent value than the $0.001 it costs to actually print the paper note/certificate that we call money. The United States $ (USD) or the Canadian $ (CAD), or any other state issued note certificate.

What is currency?
Some would say that currency is money. Currency is actually just a unit of exchange, and money is one of many mediums of exchange and is widely accepted within a collective.

A long time ago people used the system of barter:
Bob has 5 oranges. He needs wants apples and potatoes. Carl has apples and wants oranges. Dave has potatoes but doesn't want apples or oranges. Bob trades Carl 5 oranges for 10 apples but he can't get potatoes. Barter's ineffectiveness lays in having an excess of a commodity (oranges) that you can't trade for what you want.

When money which is generally accepted is introduced:
Bob trades his 5 apples to Jim for $10. Bob takes $5 and trades it with Carl for 5 apples and takes the other $5 and trades it with Jim for 5 potoatoes.


What dictates the value of money?
The obvious and bottom line fact remains the value of money is dictated by the amount of goods and services which can be purchased by that money. This is highly dependant on who is willing to accept the money as a legitimate form of generally circlated tender. On this point, the circulation of the note in terms generally accepted tender is what validates and holds the purchasing power of money. Value is based on the want and need which is a function of its liquidity and circulation.

So what is money?
Money is any form of generally accepted tender used to facilitate the exchange of goods or services. Money can take many forms as it can also be anything and everythingso long as it is accepted in its marketplace. A simple IOU note made out to a friend, Air Miles, Pepsi Points, labour hours/time, and marbles and gum drops in a playground. If we accept it as a from of trade and we can leverage it to repurchase other goods and services, it is money.

Other forms of money:
- Stocks
- Bonds
- Time
- GIC's
- Treasury Notes
- RRSP's
- Insurance Policies
- Gold/Precious Metals
- Oil
- Stock Options
- Real Estate
- Option Notes

Open up your mind, and be free of what you think you know. Many people, will have to take the first step to cross the street, entering through dark alleys, and making your way on to the path of personal financial control. It is possible and it is attainable...in fact, it is only down the street if you can learn to see it with your own eyes. Join the knowing on "The In Street".