What gives money its value? [explained in 199 words or less]

Let’s take the Turkish Lira as an example. Start by trying to understand, what the value of all Liras in circulation would be. To do that, ask yourself what all those Liras represent. Well, they represent all goods and services that people are willing to trade using those Liras. Now, imagine you wake up tomorrow and, NOBODY on earth is willing to trade any good or service using the Lira. What do you think the value of your Liras would be? Exactly, near to nothing!

In the same way, the value of all Liras would decrease if those people would be producing less goods and services.

Now that you have figured this out, what would happen if the balance of goods and services traded with the Lira would remain the same, but the banking system would double the amount of Liras in circulation? Exactly, that would mean that you would need twice the amount of Liras to buy the same goods or services! In other words, every single Lira would buy you half the amount of the same goods and services!

This is why inflating the money supply by printing money, without adding value is pure theft!

"Financial Liberty comes from decentralization"

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