What is Money and
where does it come from?
I could just go in on
Wikipedia this morning, but instead I decided to just write down these ideas
and thoughts - Thinking for yourself might sometimes lead to the wrong answer, but often lead to interesting ideas...
What is Money?
Money is the
"stuff" you use to trade items/services etc. with. In the beginning
you had to exchange chickens with cows (a bit cumbersome). Then gold was used
as a universal trading currency, and after nations had stockpiled tons of gold
they issued "money" that represented a fraction of that gold. Today,
Money is no longer bound to gold or anything physical - It is just numbers that
compared to other nations money have a value that is proportional to its
"attractiveness". Attractiveness is a bit diffuse, but if the nation
produce "stuff" you want - you have to give some of your money to get
it and thereby increase the value of the producing nations money.
Generally - the price
of "stuff" (and thereby the value of the money in which the price is
noted) is price that the buyer wants to give.
This seems simple and
is more or less the explanation for most economics - even this economic crisis.
Too many people had too much "stuff" that no one wanted to buy.
Buyers stopped beliving that the money that was lent out could lead to any
profit and therefore they didn´t buy (of cause - this was more a realization,
than a choice). The foundation is still the same - money is what is traded for
"stuff"; not what it is expected to be traded for.
But where do it come
from?
Gold doesn´t create
money.
People alone doesn´t
create money - otherwise China and India would be economic superpowers just
because of their population size.
Production in itself
doesn´t create money - it need buyers for that.
"Stuff" cost
something to make or give – it costs time. But time in itself doesn´t create money -
otherwise I could just let time fly and get money from it. But time spent on
“stuff” that improves people's lives creates value in a society and thereby
money. Most important is the time spent on “stuff” that gives people more time
to live and enjoy. In short investing in “life-time” (yes, life and time) creates
money.
Both people and
production is important value amplifiers for lifetime improvements, but are in
themselves not effective in creating value and thereby money.
We all know the
saying: “Time is money”, but I would also turn it around and say “Money is
time” – “life-time” – time that even our ancestors have spent so we could get a
better life today. That’s why the ultimate investment wil always be in our
children – they will always have more time than we have.
The money we have
today is the stored lifetime of many generations (minus the destruction/killing
from conflicts/wars) - maybe even all the way back to the beginning of
civilization. With money representing both time and lives I believe we can
better appreciate why schools and healtcare are good investments, or why we
should expand towards the stars.
A thought I had was
this: By using some of their accumulated life-time (money) to buy Louisiana,
Alaska and other territories, The United States hoped to gain even more lifetime
from the spreading of their nation. Today they are a superpower with more than
300 million people – huge amount of lifetime is stored thereby creating a
strong economy.
Many decisions around money is based on the
simple question: What should I use my stored lifetime for – How should I invest
it in order to get more? What should we then do in order to get more money into
the world?
Trust is an important
issue for a good economy (and for kickstarting it), which is related to a
strong social coherence in the society – That too is related to good
investments in lifetime.
The attractiveness of
"stuff" (and thereby the creation of money) seems to have a strong
relation to its ability to reduce waste of lifetime - food, medicin, cars,
trains, phones, Internet communication, calculators, houses, clean water,
heating, and energy to drive them all. Therefore, I foresee
that the next leap for the world economy will be when we find the next big
thing that can give us more lifetime.
How would you create
more lifetime and what would you invest your lifetime (money) in?
Option: Maybe only use one heater of the index finger and have a metal plate on the thumb.
