Regarding Money

Author Topic: Regarding Money  (Read 1344 times)

Offline papelrezwan

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Regarding Money
« on: August 02, 2010, 03:35:52 PM »
What is Money?

Money is any superior that is extensively worn and accepted in transactions involving the reassign of goods and services from one individual to another. Economists make a distinction in the midst of four different types of money: commodity money, fiat money, fiduciary money and money supply. Commodity money is a good whose value serves as the value of money. Gold coins are an example of commodity money. In most countries, commodity money has been replaced with fiat money. Fiat money is a good, the value of which is less than the value it represents as money. Dollar bills are an example of fiat money because their value as slips of printed paper is less than their value as money. Bank money consists of the book credit that banks extend to their depositors. Transactions made using checks drawn on deposits held at banks involve the use of bank 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.




Types of money

Commodity Money:
Commodity money is a form of money which has an intrinsic value, meaning it is worth something in its own right rather than simply being a token of financial value such as a banknote. The best known form of commodity money is gold or silver coins, though any commodity can fulfill this role.

Fiat Money:
Money which has no intrinsic value and cannot be redeemed for specie or any commodity, but is made legal tender through government decree. All modern paper currencies are fiat money, as are most modern coins. The value of fiat money depends on the strength of the issuing country's economy. Inflation results when a government issues too much fiat money.

Fiduciary Money:
Fiduciary money is based on the promise by a participant of the transaction to pay in commodity money or in fiat money. The contemporary monetary systems are mainly fiduciary, e.g. bank money, which is also called fiduciary money as it is based on the trust that the bank enjoys with respect to its practice of "pay as promised." In today’s globalized monetary system the most pertinent form of fiduciary money is the credit card, a breakthrough system of monetary transaction that has elevated the status of the consumer like never before.

Money Supply:
The total supply of money in circulation in a given country's economy at a given time. There are several measures for the money supply, such as M1, M2, and M3. The money supply is considered an important instrument for controlling inflation by those economists who say that growth in money supply will only lead to inflation if money demand is stable. In order to control the money supply, regulators have to decide which particular measure of the money supply to target. The broader the targeted measure, the more difficult it will be to control that particular target. However, targeting an unsuitable narrow money supply measure may lead to a situation where the total money supply in the country is not adequately controlled.




History of Money

Barter:
The first people didn't buy goods from other people with money. They used barter. Barter is the exchange of personal possessions of value for other goods that you want. This kind of exchange started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock was often used as a unit of exchange. Later, as agriculture developed, people used crops for barter. For example, I could ask another farmer to trade a pound of apples for a pound of bananas.

Shells:
At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The cowry has served as money throughout history even to the middle of this century.

First Metal Money:
China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be thought of as the original development of metal currency. In addition, tools made of metal, like knives and spades, were also used in China as money.  From these models, we developed today's round coins that we use daily. The Chinese coins were usually made out of base metals which had holes in them so that you could put the coins together to make a chain.

Silver:
At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the appearance of today and were imprinted with numerous gods and emperors to mark their value. These coins were first shown in Lydia, or Turkey, during this time, but the methods were used over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman empires. Not like Chinese coins, which relied on base metals, these new coins were composed from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency:
In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the beginning of a kind of paper money.

Noses:
During the ninth century A.D., the Danes in Ireland had an expression "To pay through the nose." It comes from the practice of cutting the noses of those who were careless in paying the Danish poll tax.

Paper Currency:
From the ninth century to the fifteenth century A.D., in China, the first actual paper currency was used as money. Through this period the amount of currency skyrocketed causing severe inflation. Unfortunately, in 1455 the use of the currency vanished from China. European civilization still would not have paper currency for many years.

Potlach:
In 1500, North American Indians engaged in potlach, a term that describes the exchange of gifts at banquets, dances, and various rituals. Since the trading of gifts was so important in figuring the leaders’ community status, potlach went out of control as the gifts became more extravagant in an effort to surpass others' gifts.

Wampum:
In 1535, though likely well before this earliest recorded date, strings of beads made from clam shells, called wampum, are used by North American Indians as money. Wampum means white, the color of the clam shells and the beads.
Gold Standard
In 1816, England made gold a benchmark of value. This meant that the value of currency was pegged to a certain number of ounces of gold. This would help to prevent inflation of currency. The U.S. went on the gold standard in 1900.

Depression:
Because of the depression of the 1930's, the U.S. began a world wide movement to end tying currency to gold. Today, few nations tie the value of their currency to the price of gold. Other government and financial institutions now try to control inflation.

Today:
At present, nations continue to change their currencies. For example, the U.S. has already changed its $100 and $20 banknotes. More changes are in the works.

Tomorrow:
Tomorrow is already here. Electronic money (or digital cash) is already being exchanged over the Internet.




The Pros and Cons of money:

It is well known the value of money. Nonentity is more influential than money. In truth, if we have no money, we cannot purchase goods, clothes and other necessaries we necessitate. Without money, we cannot walk off to the movies, theaters or other amusements places.

How can we fritter our free time pleasantly on rainy evenings without a color television in front of us? Music from can relax us quickly after a hard day of work. But how can we satisfy our needs, our desires and our pleasures when we cannot afford to buy them?

Thanks to money we can improve our spiritual activities easily. We can go to any schools; any universities we like to further our acquaintance. If our parents are wealthy and potent we may be sent abroad to study. In addition, we can enjoy pure glee by contributing our money to Charity funds to help the poor, the wretched and the victims of other disasters.

But money not only brings us the superior but the horrific as well. This accounts for much of the malice in the world. The moneyed often depend on it to oppress the poor and millionaires sometimes delicacy their servants with great cruelty. Many young people, being purse proud of their parent’s wealth and sumptuousness, desert their school activities, constantly play truant and indulge themselves in alcohol, gambling and debaucheries. They often commit suicide after playing ducks and drakes with all their parents’ fortune. Money, in this way, is the root of all evils.




The significance of Money in One’s Life and cerebral wellbeing:

We all know about the significance of money. Without money we cannot do anything... However, if we only care about making money and nothing else, many parts of our lives remain unsatisfied, which can bring us various problems.
Money is not a purpose in life, but a way to manage living. It should not be more important for you than your dignity and your moral principles, and you had better accepting living poorly than steal money from other people or do dishonest things to achieve your goals.

On the other hand, you should not despise your personal life because you are too busy working in order to pay the bills, otherwise you won't have any family. For what would you work so hard, if in the end you would be left alone? Your wife or husband needs your attention too. Your children need your presence and advice.
If you care only about having money, without dedicating any time to the people you love, they will abandon you. And in case you do make such mistake, your mental health will be damaged too. You'll start feeling depressed, and your depression could easily become a neurosis.

The importance of money in your life has to be very well defined. If you are obsessed about being rich and about keeping your position, you are in a very dangerous area.
Pay attention to the way you use your money if you are too rich and powerful, because you may make many serious mistakes without understanding what you are doing, and nobody will correct you. Nobody will dare to go against you if you are a millionaire, and this means that you are free to do the most horrible things, without being prevented or punished for that.

Do you think that this position is a privileged one? You are quite wrong if you do, because when you have the power to do whatever you desire, you let your selfishness dominate you. Besides that, the people that are near you may envy you and try to take your place, betraying you.

Never abandon your moral principles! You need them in order to keep your balance. If you are too selfish and greed characterizes your life, learn how to be generous and help the poor. They need compassion because they haven't had the same opportunities that you had to make money, and they are not as talented as you are.
Now, in case you are like most people in this world, and you have no money, don't feel sad about that. Be patient and work, and you'll manage to make enough to pay for what you need. Don't let the lack of money become a nightmare in your life.

Make a plan and try to stick to it. The lack of money is not the worst problem you could have. Be grateful for your health, and work without resentment.
Always keep in mind that the psychological problems provoked by immorality and greed are worse than poverty, and never complain about anything.

Christina Sponias continued Carl Jung's research into the human psyche, discovering the cure for all mental illnesses, and simplifying the scientific method of dream interpretation that teaches you how to exactly translate the meaning of your dreams, so that you can find health, wisdom and happiness.



Conclusion:

In winding up, there is no alternative of money. Again, bliss does not depend on the magnitude of money but on the way how we exploit it. We should exploit our money as it should be. The precise bring into play of money may fetch us a comfy existence and a jovial empathy.
Md. Rezwanur Rahman
MBA, BBA,
Student Counselor,
Daffodil International University
Executive Member, DIUAA
Cell: 01713493051, 01717352538
E-mail: rezwan@daffodilvarsity.edu.bd

Offline raju

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Re: Regarding Money
« Reply #1 on: August 02, 2010, 09:05:55 PM »
Thanks for you educative post.
Syed Mizanur Rahman
Head, General Educational Development &
Director of Students' Affairs, DIU

Offline nature

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Re: Regarding Money
« Reply #2 on: December 12, 2010, 09:44:46 PM »
Informative post.................
Name: Md. Faruque Hossain
ID: 142-14-1436
Department of MBA
Daffodil International  University
Email:faruque_1362@diu.edu.bd

Offline goodboy

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Re: Regarding Money
« Reply #3 on: December 13, 2010, 08:24:58 PM »
"MONEY" is more than what we think of it................It is an unthinkable creation made by human..........
It has splendid features & options to develop.........more & more features are being developed time by time.
It is the thing that we should be possessed....
Md. Abul Hossain Shajib.
101-11-1375
Department of BBA, Sec:B.
25th Batch.
Daffodil International University.
Email: shajib_1375@diu.edu.bd
Admin Executive
creative.bd

Offline tasnim_eco

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Re: Regarding Money
« Reply #4 on: December 15, 2010, 10:38:34 AM »
This is really a rich post. i think the best description of money is," money is what money does".