Tag Archives: fiat

The essence of money – Day 91/139

In the present day society for most people money still equals cash. Cash is the manifestation of money that people can easily relate to.

But it isn’t the pieces of metal and paper that are valuable.

The essence of money is that its value is what it can buy. The value of any currency is just a mass hypnosis of the society. The only thing making money valuable is the fact that other people too believe in the value. Theoretically speaking, people could lose their faith in the value of money overnight.

To solve this problem of fiat money some people have a solution.

In financial crises precious metals, especially gold, have held their value. Gold has to be the ultimate currency, hasn’t it? King Midas would surely disagree. The fact is that gold has very limited use for people. Certainly more than paper but gold too is valuable only because people think it’s valuable. This mass hypnosis has merely continued for thousands of years.

It can help to change your attitude towards money.

If you can agree that money is nothing but a big shroud that is pulled over our eyes, you might want to stop worshiping it. What would you use to pay for food on a desert island?