People started using bartering things as a way to exchange goods and services.
People started hoarding salts and weapons knowing that these things are useful and can be traded for goods and services. This started the commodity as money.
But it was hard to keep track of money. So people started using seashells. This seashells soon become a problem because everyone can pick up seashells on the beach.
The idea of coins started from china
The value of a coin was relative to how the money was made. If it was made out of 1 gram of gold, it will be 1 gram of gold.
But sooner the kings realize the power of money. Due to the scarcity and rarity of golds, money was produced less. Thus they cut down the materials slowly by slowly to cheaper materials while also remaining the value that it has determined by what the kings said them to be. It's not about its weight and property(silver, gold) anymore but it's about the face and the meaning assigned to it by the kings.
Soon, carrying coins became a problem because it was heavy to travel and do international trading. Thus king created papers, these had stamps on it with a king thus the paper was proved to be valuable.
^ The two paragraphs above is where the illusion of money started. Every value of money was now determined by what the king set it to be, not because of its inherited worth.
10:15
Why does inflation occur when the government prints lots of money?
And if the government has been printing lots of money, that means there will be lots of money circulating around. So I guess to keep up with the supply and demand?
Now, there's this idea that the money you store in a fiat currency in the bank will deappreciate its value day by day since the government prints new money everyday. He recommends to buy assets that appreciates its value faster than inflation, like land.
There's also a thing about bonds and that at the end of the year, the government has already spent the money and can't pay the bondholders, meaning they do something that I don't quite get it and then they use it to print more money.
Money: Humanity's Biggest Illusion
https://www.youtube.com/watch?v=MFO6OtnmEDo
Created: 2023-10-05
