We all know what a Dollar bill looks like, but is it really money?
What is it that is making the paper that it is printed on so valuable?
Background of money as we know it
At the end of WW2, the Brenton Woods System was formed (1944) whereby it was agreed by forty-four countries that they will fix their money to the US Dollar and that the US Dollar will be fixed to gold. The system became operational during 1958. The agreement was to keep the dollar price of gold fixed and to adjust the supply of dollars to maintain confidence in future gold convertibility.
Did you know that during 1971, the United States abandoned its responsibility, previously agreed to by these forty-four countries?
The reason was, that at the time, there were more foreign-held US Dollars in the World, than the USA had in gold. The Dollar was prone to a “gold run”, which could have resulted in the collapse of the US money supply and economy.
Have a look at this short video clip explaining it all.
In 1971 the US Dollar became a free flow currency, no longer backed by gold and the money of other countries followed suit.
…. so, my question: “What is real money?” …. What gives money value today?
Government manufactures money.
Money as we know it, is not backed by anything, but the good-standing of a government.
The control of money for a specific country became a government function. This applies to all countries and to all currencies. The Central bank of a government is responsible for money affairs. Both monetary and fiscal policies can be applied to control an economy. Government is in control of Central bank and Central bank is in control of the money supply of a country. Government is therefore in full control of how much money they want to allow to be “manufactured”.
Our present money does not represent any value of substance. It is not backed by any commodity or any tangible asset value. Our money is not backed by gold or silver at all. Money merely became a “promise to pay” from the banks.
The value of money is thus system based and not commodity or tangible asset based at all. The good-standing of government becomes the guarantee that backs money.
Inherent, the bank note that we hold in our hand today, has the commodity value of a piece of paper with printers ink spread over it. Its monetary value is purely based on a government controlled system and we all know that systems are man made and that any system can fail.
From Wikipedia, the free encyclopedia
“Fiat money is a currency established as money by government regulation or law. The term derives from the Latin fiat (“let it become”, “it will become”) used in the sense of an order or decree. It differs from commodity money and representative money. Commodity money is created from a good, often a precious metal such as gold or silver, which has uses other than as a medium of exchange (such a good is called a commodity), while representative money simply represents a claim on such a good.”
Think of it.
In a transaction, we normally experience that two parties are involved. A seller and a buyer. Well, actually there are three parties involved, namely a seller, a buyer and the bank. Reason for that is that the buyer pays the seller for the merchandise by offering a piece of paper (money) that represents a promise-to-honor by the bank. Even more so with electronic payments. If the bank doesn’t honor the payment the substance of exchange is void.
As explained, the value of money is entrusted to government. Government again, is entrusted to politicians.
My question is; “Is politics a clean sport?” …can we therefore put our trust in paper or electronic money?
Electronic money transactions are the most convenient for the consumer at present. We carry plastic cards in our pockets instead of paper money and we transact with EFT payments instead of writing cheques.
We know by now that banks don’t have gold in their vaults to back up the issue of money. Bank notes and coins are also on their way out. Most transactions are now made by electronic entries, so is the money issue of central bank. The money supply system is therefore getting more “systemized”.
Think of it.
The electronic money entries sitting in our bank accounts are merely entries. It is not money, but rather an electronic promise-to-honor by the bank.
Ask any formal banker about crypto-currencies and they will immediately point out the risks to you.
Is our electronic banking system not also leaning strong in the same direction as crypto-currencies?
What was it like before?
Before the forty four countries tied their money to the US Dollar that represented a gold pool, money was backed by gold and even physical gold and silver was used as form of payment. Gold and silver are commodities and the value thereof are determined by by the interaction of market demand and market supply.
Unlike a transaction where payment is made with monetary currency and there are three parties involved as explained, commodity payment only involves two parties. Commodities are not the product of the “manufactured system” by which the bank and by implication government has control over money. Commodities are tangible assets and the value thereof are controlled by supply and demand. If something is sold and payment is made in gold for instance, the transaction is between two parties only and it is rather a barter transaction instead of a monetary payment transaction.
Buying and selling and using commodity payment as form of bartering is not subject to the risk of government controlled systems. The payment vehicle has its own inherent value that is not subject to the risk of systems that can collapse.
This might be a shocking truth, but it is facts:
- Money as we know it is not backed by gold or silver or anything of value.
- The only thing that renders value to money is a system.
- The system is controlled by government.
- Governments are controlled by politicians.
- Politics is not known to be a clean sport.
Think of it.
Is a monetary system controlled by politicians a trustworthy system?
Is this real money for you?
… you decide.
In answer to my opening question “What is real money?”
… Money as we know it is not real, it is a system.
… The system got rid of real money.
… Real money no longer exist.
… A rather shocking truth, but it is.
And the big deal about all this is?
Figures don’t lie. This is extremely interesting.
A value comparison between cash and gold:
This is a practical demonstration of the direction that the system went, compared to the value of gold as a highly valued commodity.
(Keep in mind that a commodity price is determined by supply and demand only. Not by government)
If you had $100 000 in cash in the year 1932, it will today have a buying power of only $2 000
That represents a decline in value of 98% (because of the devaluation of money and inflation)
In other words, your $100.00 is worth only $2.00 today.
If you had gold to the value of $100 000 in the year 1932, it will have a value today of $4 449 313
That’s right, Four million four hundred and forty three thousand three hundred and thirteen Dollars.
Gold has outperformed cash with more than 4 300 percent.
Ponder on this.
– How on earth can your savings outperform inflation and the devaluation of money if you have a linear income?
– Should we not all rather be saving in gold?
– Real tangible gold that you can hold in your hand that is.
– Not gold shares , futures or gold that is held in “paper” markets.
*** Did you know that it is possible to own your own gold?
*** Did you know that gold can be purchased in transaction friendly quantities?
Real tangible gold that you can hold in your hand.
….And to top it all, As an additional option, you can get paid in Euros from this amazing business!!
Follow this link to find out:
1. What the gold offer is about.
2. About the company.
3. The product (Gold)
4. How to transact.
5. Optional: Affiliate Marketing Plan
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Cobus vdM / https://mybusinesswhy.com/