By Jeswills Eleke Updated March 4, 2024 Facts curled from references GDI Innovations Team: gdihq.com/about
What is Money?
Money is a means of exchange, that is no longer burdened by the weight of gold but by the floating trust of the people. Pre-Nixon shock, US dollar was pegged as $35 per ounce of gold but now money does not have any underlying value – it is floating and it is called fiat money, which is without intrinsic and commodity value.
Money has many things. It has law, a spirit, community with leaders and subjects. It influences both the rich and the poor. It could have inherent value, commodity value or no-value at all.
Money is a means of exchange and has almost always been negotiable. A dollar is not always a dollar and it all depends on who is exchanging it.
764 years ago, in 1260, barter system and coin began its decline [of use and acceptance] in Asia, where currency [the money almost as we know it today] has its earliest use.
Sometimes, in the colonial era [in the case of France and Canada, for instance], IOUs were issued by governments to avoid returning back to the barter era and in 1870s, currency’s value was based on the amount of gold a country has in its reserves – at this era money has a representative value.
Stability of a monarchy or government greatly affected the value of money and thereto its ability to trade in the international currency market.
Human means of exchange lost its cultural (peer to peer) value to the government and its elites who buy up currencies, which started the currency market that negotiates the value of money today. So, what you have can lose value based on the next person’s negotiating powers, or what the government has valued it, or what perception the international community perceives of the country’s stability. 5000 worth of a currency in one country could mean nothing at all in America – the country with the mostly widely used currency (the US dollar).
Battering is still existing on the sidelines with a moniker B2B (Business to Business): it never died over 5000 years ago because the true meaning of money still lies in the system of exchange and the breach and trust in money lies in institutions formed by select few who make the simplicity of money very complex. Money was invented before written history began and both illiterates could deal with it without any encumbrance of economic-worth semantics.
Money has been evolving and people are still deciding what money truly is. There are types of money, ones with intrinsic value, or representative value but the most common is the one that has no value – Fiat money, which is most popular.
Fiat money generally does not have intrinsic value and does not have use value. It has value only because the individuals who use it as a unit of account – or, in the case of currency, a medium of exchange – agree on its value. So, the government now spends more money to print money of lesser value.
Money has taken two main forms, divided into the broad categories of money of account (debits and credits on ledgers) and money of exchange (tangible media of exchange made from clay, leather, paper, bamboo, metal, etc.)
At a time, gold and silver were money but silver money weighed more in value than gold.
Another step in the evolution of money was the change from a coin being a unit of weight to being a unit of value. A distinction could be made between its commodity value and its specie value (its value as a coin). The difference in these values is seigniorage – the difference between the value of money and the cost to produce and distribute it.
Sometimes governments would reduce the amount of precious metal in a coin (reducing the intrinsic value) and assert the same face value, this practice is known as debasement.
Money is also valued by a coincidence of wants. The assignment of monetary value to an otherwise insignificant object such as a coin or promissory note arises as people acquired a psychological capacity to place trust in each other and in external authority within barter exchange.
Monies are used to create, maintain, and otherwise reorganize relations between people. So, money creates, maintains and reorganizes relationships.
Image: Floating Nigeria Naira
Money in the Bank
When you deposit money in the bank, the bank owes you and they use your money to trade for interest with others who may need loan but this is not a straightforward and simple process. However, this should amount to interest accruement for the depositor and a leverage for the bank to make money for themselves. In some situations, the bank can also charge you for keeping your money, when it is meant for business, as with corporate or similar accounts.
However, you can negotiate zero Commission-On-Turnover (COT) [amount the bank collect]. They charge it whenever you withdraw your current account money but waives almost nothing when they use it for other lending businesses.
When you have savings in your bank account, the bank owes you and they should attend to you with dignity because without your fund, a fraction or bulk of their operations [which depends on the culmination of all deposits] would be affected adversely.
Money At Hand
Some people store a lot of money in their homes as cash or convert it to assets and put a few wads in their pocket. This type of money [at hand] serves as a form of security, in the event of urgent accessibility of funds where regular banking operations are not present or easily accessible, or it becomes a means of survival where banks freeze your funds, or have folded up (gone bankrupt).
It is advisable to have money at hand [kept in your homes or in your pocket]. True survival [in some instances for medical care in some non-developed setting (areas where virtual money is of little or no effect or a place where barter is still a system)], would mean the small change in your wallet or the bulk in your house safe.
If they would tax you a lot [this could mean the government and banks charging you too much for keeping money] in keeping your money in the bank or cause you to be broke-in-suspension [a time when you cannot access your funds due to several reasons, which may include network connection issues], it is advisable you keep some good money [equitable by your status, standard and interpretation of good money] at hand.
But if you consider robbery against you a threat or you are too exposed to greater risks, you could spend more protecting your money or converting it to some more solid [an asset that may lose value during urgent conversion] or liquid [an asset that almost loses no value during conversion]. But experts will advise that it is better off in the bank.
Breach and Trust of Money
Fiat money [the most widely used money found in your pocket or bank] has no intrinsic or commodity value, except what parties agree its value is or will be – this is the trust of money. On the other hand, when people or institutions fail to redeem IOU promises [which is the money you kept in their care] by absconding or going bankrupt without any form of full insurance placed on the deposits, then that is the breach of money.
If the Bank of England started the central banking system, why is the US dollar the international currency of exchange? [The answer is in the Bretton Woods Agreement]. And why despite the widespread use and need for dollar, the pounds sterling of the UK is higher in value? [They say it has a complex undertone]. The US government is stronger and richer than the UK but their money’s value is poorer than that of the UK- that is the paradox of money.
Money started with real value [based on real worth or based on commodity value] but it left that part as soon as people put their trust in the regulators who are made up of select individuals.
Money can be simple numbers showing on your screen or software code called cryptocurrency. Those who invented cryptocurrency saw the no-intrinsic-value nature of money (the excessive trust in government control, breach of privacy among other reasons) and how the breach and trust of money keeps writing and re-writing the history of money – an unending piece of mystery.
The mystery of money – the rich and the poor have it, yet the poor serve the rich who has it more.
According to the Bretton Woods agreement, a US dollar, which was adopted as the global reserve currency, would be $35 per ounce of gold but the US government soon printed more money than the available gold reserve that led to what is later known as Nixon shock – when the president shockingly announced that dollar is no longer valued based on available gold.
What holds the value of money down [what makes it thick and heavy], which was gold, left it and today money floats – determined by speculations, short positions, presumed economic stability and much more complex plethora of rules of engagements [like hedging] which makes the poor poorer and the rich richer. This is breach of money.
Anchor Question (AQ)
How can I make a lot of money today: Create more trust in yourself and in your system by making things appear more straightforward [easy to understand by your stakeholders, investors or customers], while taking care of the complexities behind the scene. People wants things done. People are fixated in the returns not so much on the process and as long as the returns seem plausible or if it impresses their thought-train, they make you richer by supplying more and more values to you [a repository of trusts in your trust bank].
In simple terms, float your reality [create the story of your projection to be compelling, which if all the factors fall in place will push and manifest the reality of your dreams and vision] because the heavy story behind your success or proposed success will make you drown before the very eyes of the very people who are meant to enrich you.
Professional Advice
Ethics: The trust between a business and its customers, investors, or partners is fundamental and should not be built on half-truths or illusions. Ethical conduct in business will create long-term value rather than short-term gains that are likely to be unsustainable if based on a “figment of imagination.”
Sustainable Business Practices: For substantial and sustained success, a business should be grounded in solid practices, realistic goals, and genuine value creation, rather than simply impressing others with inflated results or potential.
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Disclaimer
The content presented in this article is the product of extensive research and the formulation of conjectures that may not be acknowledged by regulated entities or government bodies. The information herein is derived from referenced articles, and the assumptions stem from the thoughtful deliberation of the author. These views should not be construed to reflect the ethical stance or business practices of GDI Innovations Limited.
References
[Further references and appendices are found within each listed reference]
