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RE: Money

in #money2 years ago

I agree with a lot of what you had to say, especially about money and its function in the exchange. Without some currency that has a uniform value regardless of where it is cashed in, making transactions can be incredibly difficult. Instead of just finding someone who has what you want, you would have to find someone who has what you want AND wants what you have. This type of transaction is inefficient and outdated. Money expedites this exchange and allows the seller to gain something of universal value that he/she can turn into goods or services at a later date. You summed this concept up nicely with, “Money is the physical form of the idea that if two people want to do business together, they must trade and offer importance for value”. Anytime two people make a transaction, they both value what they are receiving more than what they are giving up, just by the nature of the exchange. Of course, for this to even be possible, society has to recognize the given currency as a stable hold of value. In the past, the dollar was tied to the price of gold which was extremely stable. Nowadays, the dollar holds its value based off the word of the government, which some find to be unnerving. It’s this idea that the dollar can be used anywhere that truly makes it a valuable asset. If all of a sudden, the value of the dollar plummets and businesses don’t accept it as payment, then the dollar is essentially nothing more than a piece of paper. One of the articles discussed how post World War Germany devalued their currency so much that cigarettes became the most valuable currency of the country. Because so many Germans smoked, this was a nice store of value and essentially became money. Money exists solely as a middleman for exchange. It can’t be used to do anything at all, yet society places so much emphasis on making money because of what it represents. Money represents anything you can imagine. It gives us the freedom to decide what we want to “turn it in to”. It’s a tool that is imperative to the entrepreneur and the economy. Efficient exchange results in an efficient and strong economy where citizens are confident that their green pieces of paper will be worth something when it is time to cash them in.