Money vs currency - money is a store of value, not necessarily paper money

Every generation needs a revolution - an entrepreneurial revolution

Mike Maloney's post on currency vs money is enlightening

1.  There is inflation - rise in prices not because  of unknown forces causing increase in cost of inputs.  There is inflation because of rise in money supply, something beyond the control of producers (farmers, contractors, manufacturers)  The  goods absorb like a sponge the increase in money supply by way of higher prices.

2  Increase in money supply comes and initiated by the central bank of federal reserve system  through various ways:

      1.  Printing of more paper currency

      2.  Pump priming, stimulus checks, ayuda

      3.  Quantitative easing -  purchase by Central Banks of debt instruments from banks

      4   Lowering of bank reserves -  more money is made available for lending (which accounts for more than 90% of money created in the economy)

      5.  Lower tax rates tax exemptions

While this is seen as pro masses, this increases money supply in circulation  Inflation is the inevitable  aftermath.

3.  Money is a store of value which remains constant inspite of  passage of time  Currency which has no basis for value eventually ends up being zero  Even crypto has failed  in this aspect as there is no real stuff of value to peg its prices on

4.   The store of values can be in:

     1  Precious metals like gold and silver

     2  Real estate 

     3  Commodities which are in constant use:   toothpaste, other well preserved foodstuff, soap

         (all the stuff of survivalist)   Andrew Tobias was right in saying that household stuff are the stocks  that you need to buy

     4.  Your own education, especially financial literacy

5.  Inflation, or more currency in circulation means the value of your nest egg, your savings can be taken away  without your consent.   It is thievery at highest level

     This post is doubtful as to whether insurance, ctd, stocks are real store of values.  This post stayed  away from a well known educational plan, which eventually closed shop

     I am wondering why a US citizen is in a hurry to sell his inherited real property in the Philippines

Hidden secrets of Money by Mike Maloney - You Tube video

Every generation needs a revolution - an entrepreneurial revolution

This series should be understood from where the author is coming from.  He is promoting gold and silver as the real and only money.

1   Episode 1.    Money vs Currency

     It all began in Egypt where currency started.   But it was not yet money because gold which they used then lacked one characteristic:    being divisible

    1.   Both money and currency share same characteristics:

         Portable (you can have in your wallet unlike in trading wherein you bring large commoditiies with             you

        Divisible     you can divide it into units for ease of counting

        Fungible      it is of similar value as the next currency

        Durable        cant be destroyed by moth or elements

        But money has one distinct characteristic that of being store of value   God and silver has distinction of storing value through the years.    It is valuable then 5,000 years ago and valuable now

    2.  Fiat currency  since 1945, after Bretton Woods agreement, govt preferred fiat currnecy, ie currency that are just paper money created by mere faith (fiat in govt) but does not backed up by real

value.  

        Money before in US, are depository receipt for gold and could be exchanged for gold coins.

        Nixon declared in 1970s henceforth, USA will no longer allow redemption of gold by US

        dollar holders

   3.  Money is not preferred because supply of precious metals and govt cant go in to deficit spending

        Currency is unlimited because centra banks can print more money or can increase money supply

        through some other means like:

   4   Increase in money in circulation, ayuda, subsidy, Quantitative Easing.   They all mean the same-

        increasing currency in circulation

   5.  All fiat currency all ended up in zero.  Bad news for all holding on to paper money

   6  Inflation is not a result of some strange mechanism or strange economic phenomenon.   It simply means that there is more more currency in circulation and thisi takes away the stored value in your

currency.  If you decrease the currency supply there is deflation.   If you decrease the value in the currency which happens when govt does it without your consent, Maloney terms is as theft

  7.  Inflation is not being felt much in USA because it is being exported world wide through trade and

       international employment.  But when nation sees through that the US dollar is worthless, all the

       dollars will go back to US and cause hyperinflation

  8.  In a decade most world currencieis;  US Russia, China have gone up by as much as 18x

2.   Episode 4 - Inflation the biggest scam in history by Mike Maloney

      See example of how currency is created as in US

    1  US treasury issues bonds - IOU  and sells this bond through banks

    2. Federal Reserve writes a check, using only accounting entries.  

        It is an IOU (but an unfounded)  - currency is created  They are merely exchanging IOUS

        Currency is created like magic (but the check is unfunded)  It is really an entry of numbers

   3.  Federal Reserve sends the check to various govt  agencies to pay for wages,, for war, and other

        govt activities

  4   The workers and other payees deposit the money in banks

  5.  More currency is created by banks lending through fractional lending  Say 10% reserve the bank

        can lend and create 10X the initial deposit.   This lending multiplies the currency further

        90% of all currency is created in the bank lending

       Take note that the currency is created from zero mere exchange of  IOU

 6.   More currency creates inflation

 7    The income tax law was created (constitution was amended ) to support the bonds  The income tax is to pay the interest on the bond.   We have to pay tax to support the currency system.  

 8.  The Federal Reserve is a private entity that pays its stockholder 6% dividend

 9.  The the debt limit law is a contradiction.   There is always a debt for every $ borrowed.   

       Thus for a $ of principal, there is another debt (2x).  If we pay the principal, the currency is 

       is destroyed.  The whole system collapses.

 10.  The whole system requires more debt to support the currency.   The whole thing continues

       the interest

      The US system only supports silver deposit

     Mike accuses the US banks the Federal Reserve of fraud, Ponzi scheme, legalized theft.  of stealing      value from the citizens.