Understanding What Is Money



An Introduction to Money

Understanding what is money is essential in learning how to protect it. In simple terms it is what we all need to be able obtain the necessities of life, but we need a deeper knowledge of its nature. Part of a paper by David MacGregor (Copyright - FreedomConfidental.com - All Rights Reserved) of FreedomConfidential.com entitled Bitcoin : The Money Revolution : A New Currency For a Free Society, describes the evolution of money and provides this keener sense of just what is money and how it comes into existence. It is part of a broader work of which other parts will appear on other pages of this site. With David MacGregor's permission this part of his work is reproduced here.

The Evolution of Money

Money is nothing more than a means of exchange. In pre-monetary societies there was barter -the direct exchange of goods and services between people. Barter gave way to various forms of commodity money - objects that most people wanted and were willing to exchange for their goods and services. And as a result, all sorts of things have functioned as money during its long history, including salt and tobacco, but what is money now?

It Doesn't???

Money evolved over time and gravitated to the most suitable form, silver and gold. These two commodities naturally arose in the marketplace as ideal forms of money because they had the required attributes - that it must be durable, divisible, convenient, consistent, have perceived value, limited supply, and be widely accepted. So now we know what is money, or at least the properties needed for something to be accepted as money.


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What is Real Money?

Later in the evolution of money people deposited their gold and silver in banks, in exchange for paper receipts which were negotiable - meaning they could be used as money. This paper money was acceptable because it was in effect backed by gold or silver. So a proxy for what is money needed to have no intrinsic value. It just needed to represent something with real value of itself.

Even later in monetary evolution, bankers noticed that not everyone wanted their gold and silver back at the same time, and realised they could make loans in excess of the gold and silver on deposit, and earn interest on them. And so fractional reserve banking was born. The meaning of what is money thus began to change. Something having intrinsic value became less important.


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The most recent stage of monetary evolution was when governments granted central banks the authority to issue paper money, or legal tender, with no gold or silver backing at all. This type of money is often termed fiat money, or money by decree. So now a definition of what is money needn't refer to anything of real value at all.

Of course, even this form of paper money works as a means of exchange, provided people accept and trust it. Trouble is, the nature of fiat paper money is such that it can easily be manipulated and devalued by those issuing it, simply by expanding the supply. This mechanism has provided governments with a virtually unlimited supply of money with which to bribe their way into power, stay in power, and generally act irresponsibly. In this limit what is money is whatever those in authority or who have political power decree is money.

Before the invention of limitless fiat money, a King was severely constrained as to his options. For example, if he wanted to go to war with another country he would need enough gold on hand. Soldiers had to be paid and armaments purchased, and if the treasury was empty, then war was not an option. But in latter days, the new “kings”- democratic governments - have been able to borrow whatever they like, for whatever purposes they deem necessary.

How Much Can I Bear?

Trouble is, this uncontrolled money creation and abuse has brought us to where we are today - indebted to the point of no return. You see, all money enters the economy as a debt, so constant borrowing and monetary expansion can only lead to more and more debt. Our debt-based money system has finally run its course, and is no longer capable of meeting the legitimate needs of people, if it ever did. Fact is, we are literally being destroyed by debt.

Debt-Based Money vs Debt-Free

What most people don’t understand is the monetary system is incapable of correcting itself. We have accumulated debt upon debt, until we are being buried under mountains of it. This is exactly what is happening now in Europe, where national debts cannot be paid off and the only apparent option is a constant diet of austerity along with debt refinancing. And what is happening there is only a foretaste of what will happen across the developed world. This whole economic mess has been caused by one irrefutable fact, that we have been hoodwinked into allowing a particular class of people - bankers, in cahoots with politicians - to issue our money as debt. This debt-money is created out of nothing and lent into existence at interest. What better way to build a fortune and control the world?

The founder of the famous Rothschild banking dynasty, Mayer Amschel Rothschild, knew what he was talking about when he said: “Give me control of a nation’s money and I care not who makes its laws.” That says it all really.

Squeeze Me No More!

To reverse this cycle of debt, economic depression, poverty and enslavement, it is necessary to come to grips with the primary cause - the very debt-based money system we have all grown up with, and accept without question. But the times are changing. People are waking up, and the internet is enabling the rapid transmission of knowledge and information.

Add to this the fact people are suffering, economies are imploding, unemployment is rising, wealth is being destroyed - and you have a social reality that is ripe for fundamental change - revolution even. And the one thing that could literally change everything, would be to challenge the money system itself and discover a way out of the debt trap and consequent enslavement to our money masters.

Who is in Charge Here?

There are essentially two types of people in this world: those who simply want to be left alone to manage their own affairs and get along with people as best they can, and those who want to control others and boss them about.

What most people don’t realise is that control over money is the perfect means of control over people, especially when the money system itself has been designed to that end. So it’s necessary to understand that to really be free, we need to be free of the debt-based money system that oppresses us

Knowledge is Power

Now that we know what is money and the problems presented by its creation and current form it is possible to look at ways to protect our assets. With governments always looking to obtain a greater share of the individual's wealth this will require some unusual approaches. It may be that the effort involved will not be considered necessary by some, even many and particularly by retirees. This will be a personal choice and assessment of the risks involved. What ever action may be taken it will at least be with "informed consent".


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