Money and Currency

What is fungible

A dollar in my pocket has the same value of a dollar in someone else's pocket

What is money?

A tool for trading your time. Its a container to store your economic energy until your ready to deploy it. Money must be a store of value and maintain its purchasing power over long periods of time.

What is deflation

Contraction of currency supply. Price fall is a consequence of this

Quantitative Easing

Currency creation

The difference between currency and money

Currency is a medium of exchange, a unit of account, portable, durable, divisible, FUNGIBLE (interchangable). Money is all that plus a store of value (does not lose its value over a long period of time)

Analogy for inflation

Currency is a pool and prices are a sponge. So if the pool grows the price absorb the excess currency and grows with it. So the currency purchases less and less. Inflation up = currency down

What is inflation?

Expansion of currency supply. Price rise is a consequence of this

What is Fiat currency

Fiat - An authoritative order or official decree. - backed by nothing. really? Fiat currencies are based on confidence. Whats that?

Food inflation

QE and inflation relationship

How is inflation exported?

Sending currency outside your country for goods. When the currency comes back then its purchasing power tanks!

Purchasing power

The dollar has lost 90% of its purchasing power since its creation

What is trade?

The exchange of values.

What is your true wealth?

Time and Freedom

What is currency?

Tool used by the government to steal your purchasing power and therefore your time and wealth.

Important

Wealth is never destroyed, it is transferred. Best investment you can make is your EDUCATION to put ourselves on the correct side of the "wealth transfer" Every crisis = opportunity

The problem with currency

government can print it and control the policies and do lots of shit Because gold - real form of money is limited - it has a 'stable purchasing power' - governments cannot print it Fiat Currencies - not backed by gold or silver - have all gone to zero Rather than storing your economic energy, currencies leak.

What is base currency

paper dollars that exist

Why QE?

Banking bailouts? Stimulus programs?

Money positive.

Can keep governments in control...how? Constraint government ability to spend beyond its means

What is deficit spending?

The amount by which spending exceeds revenue.