"Gold is Money, everything else is Credit" - J.P. Morgan
This is a very powerful definition and need to be understood in depth because it covers the 3 things author mentioned and also what you mention.
Simply put, in my vision, money, is just a 'tool'. One can spend it and create value out of it or get value out of it. It could mean to invest in assets such as real estate to gain some passive (supposedly) income perhaps at a more selfish level, or it could be used to build assets such as companies that create value through their products and services which are likely to solve a problem for someone (customer) on the planet. JMO.
You have failed to define and explain money and wealth. I would love to read your thoughts on the subject. Here is my definition and explanation of Money and Wealth.
Like Time, which Measures masses and magnitudes, Money measures Production and Value.
I know this is true because I must produce to create money in my life and I must give that money away on that which I value.
Wealth is Purchasing Power that we Measure with Money.
Value is an interesting construct that is not actually found in nature, rather it is found in the individual.
For example, I value lard. I value quality lard from a pastured animal and I especially value leaf lard the most and I will pay $10 or more a quart for it. Would you pay $10 a quart for Leaf Lard? I very much doubt it proving my point about Value.
Production also are not things found out in nature, but an attribute of Individual action.
Money is a measure of Production and Value.
I also know that money CANNOT be a store of value because one, I must give money away to get what I value and 2, value comes from me and not the measure I use for my Production and Value. ,
Thank you for your comment! So interesting to think about these questions. I think you are right in that money is a measure of value in some way - but yes that value can be subjective. I guess that's why we have negotiations and haggling - we value things differently.
Yes I agree money isn't a store of value - as due to inflation it loses value over time, so itself loses value.
And value goes up and down based on demand - look at the gold price for example.
and wealth is again quite subjective. Someone may have very little, and feel extremely wealthy, as what they do have allows them to live in their abundant state - based on what they feel they need.
Some lovely questions here which I will keep pondering - thank you for making me think.
Inflation has three faces, there is Supply, not enough, price inflates, there is demand, high demand price can go up, and then there is confidence, a loss of confidence can cause a price to plumet, or as in the case of Hyper Inflation, a total loss of confidence in a monetary system.
Another thing about inflation. If I purchased a house 30 years ago for 100,000 and sold it recently for a million. That is wonderful inflation I love.
The stock I might have purchased 10 years ago has inflated 100+% and I love that inflation as well.
"Gold is Money, everything else is Credit" - J.P. Morgan
This is a very powerful definition and need to be understood in depth because it covers the 3 things author mentioned and also what you mention.
Simply put, in my vision, money, is just a 'tool'. One can spend it and create value out of it or get value out of it. It could mean to invest in assets such as real estate to gain some passive (supposedly) income perhaps at a more selfish level, or it could be used to build assets such as companies that create value through their products and services which are likely to solve a problem for someone (customer) on the planet. JMO.
You have failed to define and explain money and wealth. I would love to read your thoughts on the subject. Here is my definition and explanation of Money and Wealth.
Like Time, which Measures masses and magnitudes, Money measures Production and Value.
I know this is true because I must produce to create money in my life and I must give that money away on that which I value.
Wealth is Purchasing Power that we Measure with Money.
Value is an interesting construct that is not actually found in nature, rather it is found in the individual.
For example, I value lard. I value quality lard from a pastured animal and I especially value leaf lard the most and I will pay $10 or more a quart for it. Would you pay $10 a quart for Leaf Lard? I very much doubt it proving my point about Value.
Production also are not things found out in nature, but an attribute of Individual action.
Money is a measure of Production and Value.
I also know that money CANNOT be a store of value because one, I must give money away to get what I value and 2, value comes from me and not the measure I use for my Production and Value. ,
Thank you for your comment! So interesting to think about these questions. I think you are right in that money is a measure of value in some way - but yes that value can be subjective. I guess that's why we have negotiations and haggling - we value things differently.
Yes I agree money isn't a store of value - as due to inflation it loses value over time, so itself loses value.
And value goes up and down based on demand - look at the gold price for example.
and wealth is again quite subjective. Someone may have very little, and feel extremely wealthy, as what they do have allows them to live in their abundant state - based on what they feel they need.
Some lovely questions here which I will keep pondering - thank you for making me think.
Inflation has three faces, there is Supply, not enough, price inflates, there is demand, high demand price can go up, and then there is confidence, a loss of confidence can cause a price to plumet, or as in the case of Hyper Inflation, a total loss of confidence in a monetary system.
Another thing about inflation. If I purchased a house 30 years ago for 100,000 and sold it recently for a million. That is wonderful inflation I love.
The stock I might have purchased 10 years ago has inflated 100+% and I love that inflation as well.
Thank you for this. That is very well explained - I think I need to update the post to include this important nuance!
Legendary. If you reference the Simpsons you earned legendary status and a sub.
What can I say, it was an epiphany!