Currency Or Fiat Money
The word currency come from the word current and means movement. Currency must moving continuously. Once stop moving, its value drop to zero. Yes, ZERO, mind you.
Still confusing? Here is simple metaphor for it. It is just like electric current. It must moving continuously to supply electric to gadget. Once stop moving, no more electric current, the gadget is dead. It is same to currency, once stop moving, there will be no more value for it and economy will be dead too.
The fiat money or currency is the money printed by government without any supporting to it. Initially, all the printed money is backup with gold in the bank. If the government print out 100 dollar notes, they need to have 100 dollar value of gold in the bank as a reserve. So now the problem with fiat money is the money printed out is not back up with gold. The government is printing as many as they like. Just as writing a blank check to the market. So, can you imagine how worthless is the fiat money already?
“Currency is money and since it is money, better keep money in bank as investment”. These were my perception and most of the people perception. So what I am going to do with the excess fiat money is turning it into asset instead of saving it in the bank. Still remember that the currency need to keep on flowing to make it alive.
I feel so good that I learn something new and important about money. There is one thing that make me feel so lucky living in the world is I am able to READ. Human get civilize through reading.
