Probably one of man's greatest inventions goes unnoticed daily as it changes hands and pockets. It is somehow a bit shocking that money has not been defined as a religion of some sort as it is a god to some worthy of worship. The greatest motivator of all time which knows not of family ties, love, prison or values; money can make people do the unthinkable. The existence of money is a marvel in itself a reflection of civilization at its prime.
It will be hard to convince people that money in its truest sense doesn't exist. The piece of papers we use as money is called fiat money; which means it has no intrinsic value at all but it has value because government has said that its legal tender. That right there is civilization! A hundred dollar bill is far much less than the value printed on it but we buy that cause government said its worth a hundred. So money actually has a psychological aspect, it is all about who says my money is worth this much. Add to the fact that banks also create money from thin air.
The gold standard was dropped in 1971, which was a system under which your dollar value was actually backed by gold in a government reserve. After that and up until now money is now a collection of psychology and thoughts linked to trade and economic and political stability.
Divorcing this system has led to countries like the USA to grow beyond their means as they have printed more money than they have in gold, last year the USA had reserves worth just $361.8bn.
Governments now have the power to create fake wealth! All those government bailouts might have been met by just a wire transfer with no need to print the whole sum but part of it to satisfy the cash demands but really most of the money always stays inside computers.
So in essence money does not exist! It is merely a collection of perceptions, emotions, forecasts, results and the power of government bundled into a piece of paper. Which in turn means inflation is a mass psychological condition affecting a whole nation. Inflation might be defined as the increase in the general level of prices of goods and services in an economy over a period in time but it is simply a lack of confidence in a currency as was the case with Zimbabwe. Imported inflation also leads us to lack of confidence in the local currency when importing goods thus the exporter will value our currency less.
The true guardians of money are the accountants. Accountants keep money alive, without accountants money would be dead. Which is why almost every corporate scandal was achieved by means of manipulating company accounts. Enron, AIG, Bernard Maddof Investments, Satyam Computer Services and recently the Olympus Corporation, The British Bank of Credit & Commerce International and Royal Financial Holdings. All accountants know these scandals could have sailed through unnoticed & thereby creating money that didn't exist in the case of Enron and Satyam's share prices.
Banks also create money. If I deposit a $100 in a Bank they keep 10% of it to satisfy withdrawals and loan out $90. That $90 loan in the account will also lead to another $81 loan after keeping 10%. That adds up to $271 of which $171 was loaned into existence!
Celebrity endorsements, Movies and Marketing perpetuate the existence of money by always creating new and expensive needs which we wish to satisfy. Thus leading to a lifetime of chasing the millionaire's lifestyle. Without all this people might actually be satisfied with what they already have and stop working for money. To make sure this doesn't happen products are made to fit your pocket. For example you can get a watch for a dollar, one for $1,000 and another one for $2million. So you will never say you have enough and retire early or even donate most of what you own to charity!
Wether it exists or not money has proved to be a necessary evil for us to have advancements in technology and to keep production in motion or maybe we are just made to believe so. Whatever the case is money simply is the greatest motivator of man.
