✪ UNDERSTANDING THE FINANCIAL SYSTEM - Money vs Currency ✪

By educating yourself. The greatest investment that you can make in your lifetime is your own self-improvement and education. Education on the history of money, finance, currency, how the global economy works, etc. Education on how the central banks and the stock markets can defraud you... and how they can scam you.

Your real riches are your time and independence. Money is just an instrument for buying your time. It's a canister to hold your financial power until you're prepared and comfortable enough to re-distribute it or use it. But the whole world has been alienated from the actual money and has been tricked into utilizing a currency - a dishonest fraud that is quietly depriving you from your two most important assets.

Money is not just coins or banknotes, it’s basically trust. Anything can be used as money, provided that there is mutual trust. The value of money depends on our trust, not on the actual worth of the materials. Money is arguably the most efficient and universal system of mutual trust ever invented.

For the majority of people, currency – more specifically fiat currency – is “cold hard cash.” They are the dollars, pesos, or yen you keep in your wallet or purse. As such, currencies serve the function of being a country’s primary medium of exchange, in the form of coins or paper.

In the premodern era, countries moved from precious metals to currency as a way to facilitate exchange among the economies’ participants. Gold, silver, and other precious materials were typically cumbersome and hard to transport. There was a need for a more portable alternative that served the same function and, most importantly, was backed by precious metals, gems, etc.

Banknotes were once a type of currency backed by gold and silver in the US. As such, banknotes could be exchanged for “legal tender” (i.e. gold and silver) at any time by the owner. US silver certificates, for example, could be exchanged for their face value in silver. The US adopted the gold standard in 1879.

Having a currency backed by an actual precious metal helped lend credibility to the governments that issue it. It facilitated the trust these institutions needed to make their currency system work. People accepted currencies because they knew their wealth was secured in (i.e. backed by) precious metals. On top of that, paper and cheaper metal coins were an effective way to conduct business.

In 1971, President Nixon announced the US was no longer in the business of converting dollars to gold at the $35 per ounce fixed value, and the gold standard was abandoned completely. With the absence of a gold-backed dollar, US citizens inherited a fiat currency system backed by nothing but the trust in the government.

Considering that a fiat currency’s value as being backed by nothing tangible, the idea of money can be contrasted against it. Money or “commodity money” can literally be any type of commodity, from seashells to stones, which can serve as a medium of exchange for goods, services, and payment of debts. Unlike government decreed and issued fiat currency, commodities like gold and silver have an intrinsic or “use value.”

The value of precious metals is inherent in their scarcity. Unlike fiat currency, which can be printed at the government’s whim, gold and silver exist in a finite amount. There is only so much to be mined and sold. Also, unlike fiat currencies and their economic systems, gold is immutable. It can’t be created or destroyed, but can only change shape. It was created at the beginning of the universe and will continue to exist forever. Try applying that standard to the paper currency in your wallet.

For thousands of years, gold and silver have served as money because of these unique characteristics. Removing our currencies from their connection to precious metals has detached our faith in their value, and allowed governments and financial institutions to artificially alter their value when they see fit. Fiat currencies come and go with the rise and fall of nations, but gold and silver will always remain.

If you look up the words “currency” and “money” in a thesaurus, each word will probably be listed as a suitable linguistic substitution for the other; however, their economic function is almost completely opposite. Understanding the difference between currency and money is critical to making smart decisions about preserving your wealth.

CURRENCY	MONEY
Medium of exchange	Medium of exchange
Unit of account	Unit of account
Portable	Portable
Durable	Durable
Divisible	Divisible
Fungible (Interchangeable)	Fungible (Interchangeable)
-	Store of value

The store of value is what differentiates fiat currency from money. Many people have been led to believe they are the same thing, a misconception that could have dire consequences in the near future. If there is just one thing that you can learn from this is to stop calling currency money.

Currency can only be called money when it can be a store of value, and the sad truth is that no currency on the face of the earth has that property. Due to the inflation, that is artificially generated by the central banks, such as the Federal Reserve through deficit spending to cover expenses by simply printing out more money instead of “earning” it through trading goods that were created or manufactured by the industries that that are the building blocks of any economy.

An economic system can only work when there’s something to back it up, right? Something like industries, agriculture or technology. Think of it this way – in order for you to have a successful business, you need to produce or provide your customers with something. You can’t just start selling nothing and getting paid for it. See the logic there? An economy needs to produce goods, in one way or another, to be able to sell them

SOURCES:
https://schiffgold.com/key-gold-news/currency-vs-money-whats-difference/
http://topdocumentaryfilms.com/hidden-secrets-money/