Most people don't spend much time wondering what money is exactly. Their major concern is how much they have, and how to get more. Usually, the question of what money IS only arises when money ceases to function properly. The past few years I have thought a lot about WHAT exactly the dollar bill is, how it is made, and where exactly it comes from. So I have put together a few thoughts and facts, since I believe it's crucial to be educated on what literally directs our daily life's. Hope you find this informative.
To me, money is not a real object. It's value is simply abstract, and controls large sums of this "imaginary wealth." Money was once valued by the worth of goods, but now in today's economic society, it is our goods that are valued by their worth in money. Today, the banking systems create money out of thin air by loaning it into existence of our economy. That simple fact means that increasing the money into the market creates inflation. This now means the banking system is required to continually grow in order to offset this inflation. Most people think money is created by government affairs by churning out millions of dollars hot off the press. The reality: Money is created every time a loan is given. Actual tangible bills only account for 5-10% of money created. The other 90-95% of our money is created through commercial banks lending up to 10 times the physical amount deposited by people like you and I. So in essence, they are charging interest on money that is not really there. These days we hear about the economy contracting or shrinking on what seems like a daily basis. This simply means that there is less available credit and fewer loans are being issued by lenders. Economic growth is directly tied to the ability of banks to give loans. Not to long ago, a found this video that explains very simply what money is and how it's made. It's a little on the lengthy side, but I still found it to be a good use of time and very informative so I hope you do as well.
Concluding thoughts...
Sometimes there are people in your life you know, or maybe even people you have never meet, that seem to have a major impact on the way you think about yourself and the world around you. For me, that guy is Zig Zigler. He said once that "Money isn't the most important thing in life, but it's reasonably close to oxygen on the "gotta have it" scale." I tend to frown upon the cliche line of "money is the root of all evil." I tend to think that the LOVE of money is what can lead to evil. The fact of the matter is, money dictates nearly everything we do. It's a tool that creates amazing possibilities, yet, life's are lost and relationships destroyed over it. The power that financial intelligence delivers is freedom from the hardships it causes when we don't understand the laws of money. When we do, it can deliver great treasures and break the bonds of financial slavery.
