Understand the common sense and evolution of currency in one minute

The need for exchange creates money.

Money is not precisely defined, but it is defined. More than 20 indicators from different perspectives exist.

The most classic definitions of money from an exchange perspective are a measure of value, a medium of exchange, and a store of value.

The increase in human productivity produced surplus, and barter emerged. A principle was determined at this time: the item must be valuable; otherwise, no one would exchange it with you.

The value of items is divided into use value and exchange value. Air is valuable, and no one changes it because it has no exchange value.

Exchange value is determined by scarcity. Scarcity in use value determines the exchange value in use value.

Bartering is inconvenient, so a universal medium of exchange is needed. The scarcer something is, the more valuable it is as a universal medium of exchange. When the value of gold is too high, cut-up occurs. This is the gold content. Currently, a standard, which is the value scale, is needed. Gold became the measure of value because of its properties.

Gold production coincided with low economic growth at that time, and the two were balanced. This balance is governed by gold. When there is an imbalance, it is either deflation or inflation.

We need a weight and measure to measure the development of the entire economy and measure individual goods simultaneously.

Fiat currency has overcome the deflation of gold and brought about sustained inflation. The euphemistic name is conducive to economic development. This is bastard logic, a changing ruler, and nothing more than a Ponzi scheme.

Fiat currency is the standard for measuring goods. The aggregate measurement is based on the adjustment principle to anchor inflation and maintain aggregate balance because inflation reflects the aggregate.

Due to the unpredictability of the economic aggregate, fiat currency is determined to have an overshoot, just like the unpredictability of death.

As for the Bitcoin standard, Bitcoin measures the total economic aggregate, and DW20 is the same as the US dollar as the ruler.

The market regulates economic aggregates, and the Fed cannot regulate them. The interest rate hikes and cuts cycle is uncertain and requires constant testing.

Market regulation is the countless adjustments that have replaced the Fed’s regulation.

Credit is also valued, but when credit is destroyed, its value is reduced. The emergence of Bitcoin shows a distrust of credit currencies.

Money is simple, but economists say it is complex. A good economist teaches economics should ordinary people can understand it.

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