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There have been many forms of money in history. Some have worked better than others because they have characteristics that make them more useful.
Better money always beats weaker money and that's a fact.
A thread of monetary properties👇
Better money always beats weaker money and that's a fact.
A thread of monetary properties👇
Seashells, glass beads, rai stones, cattle and silver are some examples of money which were eventually dethroned by gold, which was in turn ousted by government controlled fiat money.
Without further adieu, money has the following properties:
Without further adieu, money has the following properties:
1/ Durability
Money needs to be durable to survive the rigours of time. Perishable goods therefore are not good examples of money. Cash is made to be somewhat durable, and Digital money is very durable. It's also the most widespread money used today.
Money needs to be durable to survive the rigours of time. Perishable goods therefore are not good examples of money. Cash is made to be somewhat durable, and Digital money is very durable. It's also the most widespread money used today.
On Sound Money Part 1:
1/ People’s choices are subjective, and so there is no “right” and “wrong” choice of money. There are, however, consequences to choices.
1/ People’s choices are subjective, and so there is no “right” and “wrong” choice of money. There are, however, consequences to choices.
2/ This is the easy money trap: anything used as a store of value will have its supply increased, and anything whose supply can be easily increased will destroy the wealth of those who used it as a store of value.
3/ For something to assume a monetary role, it has to be costly to produce, otherwise, the temptation to make money on the cheap will destroy the wealth of the savers, and destroy the incentive anyone has to save in this medium.
