Money: What's Happening To It?
Our economy revolves around this type of paper. Without it, you wouldn't have the house you live in, the clothes you're wearing, the food you eat, the water you drink, the air conditioner that keeps you cool, the list is endless! But why is it so important? When you work, you don't usually do it for free. You do it for something in exchange. Something in exchange for your time and work. They used to use gold and silver. Now, we use paper. The coins we have including quarters, nickels, dimes, and pennies don't live up to their names anymore. The nickel isn't 100% nickel. The penny isn't 100% copper. Why? One word: Government. Every day, the government creates more and more money out of thin air. When they do this, our hard-earned money goes down in value. You probably think that gas prices are going up because there is less gas. Well, that's a small potion of the reason. The real reason is that the value of the dollar is going down causing prices to fly sky-high. I'd advise you not to sell any gold or silver you have now. Hide it in a safe place and save it. Gold prices are really high and will probably get higher while the dollar goes down. Keep your gold and silver. It will be worth more in the future and what's the point of selling it for paper? Really. There, is no point.
Google money. Learn as much about it as you can. It's WORTH it!
Why Paper Money?
Why do we use paper as our form of money? Well, back in the OLD days, they used to barter which means trade items that they didn't need for items that they did. Here's an example:
Okay, pretend that I'm a farmer and I have goats, cows, chickens, and other animals. Pretend you were a blacksmith and made tools. So, here you are a blacksmith with tools but you need some eggs. What do you have to do? You have to make a deal with me. So, the blacksmith tells the farmer, if you give me the food I need, I'll give you some tools. Sounds easy enough? Well, think again! What if the farmer said, Yeah, well I don't want any tools. You'd have to go trade with someone else for something I'd want. It would get very confusing! So, they had to come up with something that everybody would accept. That's where money started.There are four main properties money has to have in order for it to be good money. First, it has to be valuable. You aren't going to sell your tv for three rocks are you?!? Second, it has to be portable. Third, it has to be able to make change with. And fourth, it can't be counterfeited (illegally reproduced).So, they used gold and silver. They made coins out of gold and silver and everybody agreed that they would accept that as payment. But, don't you think that would've gotten heavy carrying around gold in your pocket? Yes, it would! It would probably make your pants fall down! So, here's another example:
Pretend, I'm a blacksmith and I can create safes and stuff. You are sick of lugging around all that gold so you come to me and ask if you can store your gold in one of my safes for a small fine. I say sure and pretty soon everybody stores all their gold there. But, no one wants to come all the way to my store just to get their gold so I start handing out paper with I Owe You written on them. So, if you buy something and give them an I Owe You, they'll say, "Hey, I know that this Bob the Blacksmith guy will give me gold if I redeem this so, I'll accept this form of payment." That's how banks got started (but that's a different story) and that's how paper dollars got started.