Money :The Way use and Misuse it Depends











I Love saving Money !!!

What Is Money?

Money is a good that acts as a medium of exchange in transactions. Classically it is said that money acts as a unit of account, a store of value, and a medium of exchange. Most authors find that the first two are nonessential properties that follow from the third. In fact, other goods are often better than money at being intertemporal stores of value, since most monies degrade in value over time through inflation or the overthrow of governments.

What Is Money? It Is More Than Pieces of Paper.

So money isn't just pieces of paper. It's a medium of exchange that facilitates trade. Suppose I have a Wayne Gretzky hockey card that I'd like to exchange for a new pair of shoes. Without the use of money, I have to find a person, or combination of people who have an extra pair of shoes to give up, and just happen to be looking for a Wayne Gretzky hockey card. Quite obviously, this would be quite difficult. This is known as the double coincidence of wantsproblem:
[T]he double coincidence is the situation where the supplier of good A wants good B and the supplier of good B wants good A. The point is that the institution of money gives us a more flexible approach to trade than barter, which has the double coincidence of wants problem. Also known as dual coincidence of wants.
Since money is a recognized medium of exchange, I do not have to find someone who has a pair of new shoes and is looking for a Wayne Gretzky hockey card. I just need to find someone who is looking for a Gretzky card who is willing to pay enough money so I can get a new pair at Footlocker. This is a far easier problem, and thus our lives are a lot easier, and our economy more efficient, with the existance of money.

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MONEY WHAT IS IT & WHY IS IT IMPORTANT

Before we begin our tour through the three Es (the Economy, the Environment, and Energy), we need to share a common understanding of this thing called money.

Money is something that we live with so intimately on a daily basis that it probably has escaped our close attention.

Money should possess three characteristics. The first is that it should be a store of value. Historically, gold and silver filled this role perfectly because they were rare, took a lot of human energy to mine, and did not corrode or rust. By contrast, the US dollar pretty much constantly loses value over time – a feature which punishes savers and enforces the need to speculate and/or invest. A second feature is that money needs to be accepted as a medium of exchange, meaning that it is widely accepted within a population as an intermediary within and across all economic transactions. And the third feature is that money needs to be a unit of account, meaning that the money must be divisible and each unit must be equivalent.

Money is lent into existence by banks 

There's nothing complicated going on behind the scenes. The great secret is that there isn't really much of a secret. Yet the truth about money eludes us for most of the time. 

The economist and ironist JK Galbraith once wrote that "the process by which banks create money is so simple that the mind is repelled. When something so important is involved, a deeper mystery seems only decent". Offered the unadorned truth, stripped of any technocratic flim-flam, we can scarcely believe it. It seems preposterous that money should have such humble origins, as though it is beneath money's dignity that it should begin life at a banker's keystroke.