What Is Money?

The most basic definition of MONEY is whatever COMMODITY (be it a product, service, or information) that is perceived to have the most EXCHANGE VALUE for what we desire. Getting what we desire often requires trading, bartering, or otherwise exchanging something for something else (be it our time, attention, knowledge, labor, possessions, connections, future possibilities, or even lives). At various times and places, people have used (the exchange of) salt, shells, beads, cacao, food, drugs, alcohol, cigarettes, animals, and even women as money.

Regardless of what is used, it is important to note that while MONEY is essentially abstract (and imaginary) idea and concept regarding payment for goods, services, and debts, what is exchanged has historically been PHYSICAL (as opposed to just numbers on a ledger or electronic digits in a computer created account). To be considered as MONEY, tokens used for exchange must be easily recognizable, divisible, portable, have high value in relation to weight and volume, and retain continuity of value over time. Most important, though, is “liquidity”. Whatever the monetary unit, it must be able to be easily exchanged for what is wanted (on what is essentially an instant basis) – without a discount and without needing to spend any of it to advertise or influence others to exchange their goods and services for it or accept it as repayment for debt(s).

“Money is a matter of functions four, a medium, a measure, a standard, a store.” That is, money functions as a medium of exchange, a unit of account, a standard of deferred payment, and a store of value.

Among the most enduring kinds of money have been “gem stones” and “precious metals” (especially gold and silver) – usually in the form of coins, bars, bullion, etc. (rather than as dust, nuggets, jewelry, or “industrial” uses). Ironically, few coins in circulation today are made from precious metals – and coins that ARE made from gold and silver are seldom considered or accepted as “money” (or even acceptable as “collateral”).

In today’s world, although they are used and valued for many things, gold and silver do NOT function as money (except between central banks). People cannot buy whatever they want with gold or silver (let alone any other precious stone or metal). Wal-Mart’s barcode system is not set up to recognize gold or silver coins – and banks will NOT redeem Federal Reserve Notes for anything of REAL value or use.

Although the price of gold and silver is steadily rising and the supply of what is available to buy is decreasing, collecting gold and silver coins is typically regarded as recreation and/or speculation – rather than wealth accumulation or an insurance hedge against the predicted devaluation and disappearance of our already worthless fiat paper and digital currency.

It is still unclear whether people will return to using gold, silver, direct barter or even access to food and water WHEN our paper currency either stops circulating (as a result of attempts to hold on to more of it) or our collective inability to EVER repay debts (with compounded interest) FORCES an alternative form of MONEY. RFID microchips implanted within our bodies may very well be used as a means of tracking and controlling us in the (near) future – if we allow it. While microchips could be required for all “legal” (financial) transactions and interactions, digital charges and credits are neither MONEY nor CURRENCY.

REAL MONEY is NOT something that is issued by governments (or central banks). It has more to do with supply and demand (in a free market where property rights are respected and goods and services are voluntarily exchanged) – and the highest bidders offer what is wanted. “Unbacked” fiat currency and fractional reserve banking are legalized counterfeiting. Those who trust government “money” will lose wealth more surely than those who do not trust it.

Money originated as a MEANS rather than an END. The MARKET VALUE most things have is only realized during an exchange – once an offer is accepted. The actual worth of anything is usually relative to when, where, how and who is buying, selling, trading, or otherwise exchanging it. Houses, stocks, and collectibles do not really change in market value until there is a (physical) change in ownership. The only value or power money really has is what people will accept for it. It does NOT depend upon what banks or governments decide, declare, or decree.

Consenting and deferring to corporate, central bank, government interference or control of money MEANS the END of MONEY as a MEANS of exchange and the perpetuation of its use as a MEANS of manipulation, exploitation, and control of people as indentured servants in perpetuity.

REAL MONEY does not come from governments and banks, it comes from other PEOPLE – REAL living PEOPLE and NOT fictional corporate “PERSONS”. Most (important) aspects of money, love, and happiness are NOT taught in school – on purpose. Ignorance makes people easier to confuse, deceive, and essentially enslave – with language, laws, and financial fictions.

Other than health, relationships are the most important aspect of wealth. Money is not really required – for anything. All your needs could be met without it. Our economy is based on the exchange of worthless paper “money” in exchange for “scarce resources”.

What if “resources” were NOT “scarce”? What if both more and/or other kinds of resources were available and accessible? They are! Are you willing to open your mind to them, change your paradigm of what is possible, and cooperate with others? What would you change if you did NOT “need” money?

© 2009 – 2012, Oren Pardes. All rights reserved.

7 thoughts on “What Is Money?

  1. Pingback: Tweets that mention What Is Money? « Appreciating Your Assets -- Topsy.com

  2. I think that money plays a large role in today’s society, however I also believe that as the economy continues to struggle more and more people will return to bartering. Which I believe is why many sites such as http://barterquest.com has seen a rise in registered users.

  3. Barter (of many kinds) may very well regain more popularity in the (near) future. Gold, and especially silver, will also return to prominence as other more commonly accepted forms of currency “collapse”. One thing that those who barter might want to keep in mind is that governments tend to consider all transfer of “value” as (potentially) “taxable”. Websites often provide a great service. While I do not advocate or endorse the one you listed, you are invited to provide more information to those who may benefit.

  4. Oren, I like your detailed explanation about money. It is complicated for those who do not know what it is, and it’s simple for those who know what money means.

    Money to me is simply “a tool” that does not have any value all by itself, but it can be used to measure emotions in order to get something of a value. Money does not make any sense, because money is simply an emotion.

    Most people get confused about money, because they trying to be too “logical about it” 😉 Just like to men, women does not make sense 🙂 You are a relationship coach, so you know what I am talking about 😛

    Same analogy, for the uneducated mind money does not make sense.

    Money does not live on a paper, but it is a symbol that lives within one’s mind.

    Does money equal time?
    Check out this video: http://www.youtube.com/watch?v=H4J5l5WPRJo

  5. As you explain in your YouTube clip, time and money are not the same – and one should be very clear about this before trading one for the other. I do not recommend using money to measure emotions. Money is often used as a tool yet it remains only an idea or symbol in our minds – no matter how we may feel about it.

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