How Money makes you rich and Fiat Currency makes you poor

Money has been around for many centuries, but most people do not fully understand it. We use money as a medium of exchange for goods and services. We also work for money, so that we can pay for things. Sometimes people save their money for future use. So we know what we can do with it, but let's explore why we could.

Money contains the following properties that makes it special:

1. Portable- it is convenient to trade with

2. Durable- it should still be there when you need it

3. Divisible- can be broken it into smaller amounts for smaller purchases

4. Interchangeable- can be traded for the same

5. Valuable- it has universal appeal and worth

US Dollars - Fiat Currency

Believe it or not, but most of us no longer use money. We now use Fiat Currency. It is a government note acting as money, and can be created without limitations.This is an important concept to understand. When there is a lot of something, it is valued a lot less.

As value declines,so does our ability to purchase goods and services,
our reward for the hard work, and savings for retirement.

Gold and Silver - Money

Only Gold and Silver can be money. They contain all the properties of what money is, and serve the purpose of what you do with money.

1. Portable- you can easily carry Gold and Silver

2. Durable- they are the least reactive substance on earth.

3. Divisible- you can create smaller portions

4. Interchangeable- Gold and Silver is the same anywhere

5. Valuable- it has intrinsic value and hasn't changed for thousands of years.



source: Lessons for the Young ECONOMIST. ROBERT P. MURPHY