Why do we end up misunderstanding Money for "Wealth"?
exceeding the prescribed limits will be harmful |
As explained earlier, our system has kept money as a means to eliminate exchange issues.
To learn the importance of money, lets see how money gets valued-
Our money today came to form as a representative which could be converted into gold or silver by application at the bank. Since banks issued notes far in excess of the gold and silver they kept on deposit, sudden loss of public confidence in a bank could precipitate mass redemption of banknotes and result in bankruptcy. Other than this, in today's economy our currency is floating in nature and the value is controlled indirectly by their controlling governments to achieve various economic goals that they might have set.
Economic achievements of nations depend on development. Development in-turn depends on value created using a standard supply of raw materials. Hence all currency values are indirectly affected and monitored by the amount of 'hard work' and 'out-come' of the hard work put in by individuals of a nation.
So to sum up the topic, when people make money in Futures, Derivatives, Options ect, they are going to harm the economy. There is no value exchanged for the money these 'businessmen' pocket. Infact it's just money changing hands. Hence when the increase or decrease of these incomes are recorded as revenue - it's a false claim. It's a claim that inflates the value of money.
Now picture the man that has made money in stocks exchanges spending it on his supplies and home. The man has eaten up on the efforts of so many other individuals who have utilized resources to produce value that can be sold on the market, by waving his wade of cash. This is how a service get's undervalued for a start.
As an how other individuals notice the luxury and time enjoyed by such money lovers, they shall also make the effort to shift occupations. Eventually, as the number of such money lovers rise and value builders fall, the services that are provided by the value builders-the ones you would actually require to 'live by' shall start getting overvalued.
This is how we end up in inflation :) This is why today the European economy managed by massive banks that earn loads of 'Interest' have started falling short. This is the only reason why China is emerging as a Super Power. Chinese governments have always focused on production and value creation as a means of growth, and today most of the goods we use come from China. I am not a supporter of Communism, but i am a supporter of value - true value.
Collecting or giving Interest to gain from Capital is a primitive and flawed concept. 'Interest' is similar to blood cancer, where money acts as a circulation element in the body of an economy.
It's a disguised inflation trigger that has machine gunned our economic satisfactions. To conclude this topic, and give you an idea about the next, think about it - if you borrow capital on a fixed interest rate from me, and incur a loss in you venture and hence have not created any value (as spoken about in Our Current Econ-System), are you still entitled to pay me the fixed amount of money?
Considering the fact that my money is hard earned cash from value exchange, would doing so contribute to economic inflation or depression?
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