WHAT IS MONEY REALLY?
Have you ever wondered what money really was? What is behind its mystique? Well, it is not gold coins. It is not a basket of fish, or a truck load of bread. Money is an idea. It is an idea backed by confidence. Nothing more. Once we had to have gold as the standard of that confidence, but now there is enough confidence in the production of products that money was backed by the production of the country and land instead.
So what else is money? Money can be considered a negotiable receipt for deposited goods. How it once worked was that a goldsmith would accept somebody’s gold and give that person a receipt in exchange, which in turn became money. But then, one day, realizing the goldsmith’s repute was good with these receipts and that they had become negotiable, he loaned a receipt based on the gold someone else, as had deposited. Then the goldsmith loaned out several receipts on the same gold. And that is how banking started.
Today a bank will loan out against almost anything that can be produced. The only real trouble comes when too many people want to cash in their receipts to get the gold or goods that have been deposited. If there is too much money loaned out and confidence downturns, then a run can start with the bank unable to honour the receipts, causing bankruptcy. Banks vary as to how many times they will loan out against what is deposited with them. Some are ten times and some are as much as 70 or more. Even a thousand is not heard of. The higher the amount loaned out compared to what is deposited the greater the risk of economic collapse. And that is what the current threatened financial collapse is about.
But for money to work, and confidence to remain steady, there needs to be a simple recognition of exchange between giving and taking. Exchange builds confidence. When the world produces real products, then financial confidence goes high. But often then banks will issue more recipients per deposited goods and that starts inflation.
As people go into ‘dealing’ in commodities and other things, buying and selling without adding real value to what is sold, then the so called production aspect diminishes and financial confidence begins to wane.
With the exchange factor, there is what we refer to in Scientology as ‘exchange in abundance’. So, instead of giving – as an example – a day’s labor for a committed return, a person could give an abundance for that same return. I have worked where I worked extra hard, I was extra courteous, and gave extra care. In return I was paid extra fast, got an extra tip with an extra meal and an extra smile. Try out exchange in abundance.
That is all money is. I hope this takes out some of its mystique.
Nick Broadhurst is the author of science fiction books, children’s picture books, and comics. He also writes articles on contemporary philosophy. For a living he is an architect, building contractor, building inspector, and worked in many countries.