Monday, March 14, 2022

What is money?

That question has likely been asked since the beginning of human civilization, and then some.

The answer is, "virtually anything". Why? Because as long as there is a general agreement about the value of something, it can be used as money in exchanging goods and services.

For example, dried tomatoes could be used if a lot of people were prepared to accept them in return for something else.

The state issued fiat (force) money we use in our societies is no different and has value in the minds of people because we can use this money to pay our taxes (rather than taking cartons of eggs to the tax office) and we get put in jail if we refuse to accept payment in state issued cash.

The latest is digital money issued by the central bank of a state which is in effect controlled by the political junta of the day, as demonstrated by our own Deputy Prime Minister Chrystia Freeland when she picked which bank accounts of political opponents to close recently.

Thanks for the heads up, Chrystia! You showed your hand so we can take evasive action for the future: Gold and silver have been used for thousands of years as a store of value, and continues to do so, long after the states that minted coins using these metals disappeared.

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