Money Vs Currency

“True wealth is your time and your freedom

True wealth lies not in the world’s glittering gleam

Nor does it lie in the riches that shimmer like a dream

Time, A treasure more valuable than silver’s caress.

And freedom, oh freedom, is the golden key,

 Unlocking the riches of being truly free.

So, cherish your time,

 let it flow like a stream,

And treasure your freedom,

like the sun’s golden beam.

For in these, true wealth resides,

In the heart’s contentment,

 where happiness abides.”

What is currency?

1. It is a medium of exchange
2. A unit of account
3. Portable
4. Durable
5. Divisible
6. Fungible

What is money?

1. It is a medium of exchange
2. A unit of account
3. Portable
4. Durable
5. Divisible
6. Fungible
7. Store of value

Eg: -Gold, Silver, precious metals, even oil but only it is not that portable

What is the difference?

Well, here’s a story for you to enjoy and understand this concept…

Once upon a time, in a bustling kingdom,

 There was a grand treasury guarded by diligent officials. Inside, the kingdom’s currency, let us call it “greenbacks” was meticulously minted and stored. The greenbacks were cherished by everyone in the kingdom because they could buy anything from a loaf of bread to a magnificent steed.

However, trouble brewed when the kingdom’s rulers discovered they could print more of these greenbacks whenever they pleased.

 At first, this seemed like a boon—more greenbacks meant more prosperity, or so they thought. The treasury started overflowing with shiny new greenbacks, and the rulers began spending them lavishly on grand feasts and towering monuments. But as the rulers printed more and more greenbacks, something strange began to happen. The once valuable greenbacks started losing their worth. What could once buy a hearty feast now barely bought a loaf of bread.

The people in the kingdom were puzzled and frustrated. Their hard-earned savings seemed to disappear into thin air, leaving them with less and less to show for their efforts.

Meanwhile, amidst the chaos, there was another form of wealth quietly holding its ground. It was known simply as “bullion coins”, in simple terms it refers to gold coins.

Unlike the paper money, bullion coins couldn’t be printed at will by the rulers. It held its value steadfastly, unaffected by the whims of those in power. People who held bullion coins found that it retained its purchasing power over time. A loaf of bread cost the same today as it did yesterday, and the day before that.

As the kingdom’s economy struggled with inflation caused by the flood of greenbacks, those who had stored their wealth in bullion coins found themselves in a more stable position. Their savings didn’t evaporate; they could still afford their daily needs without worry.

In the end, the tale of the kingdom taught a valuable lesson: while governments could print currencies like greenbacks and dilute their value, they couldn’t replicate the reliability and stability of bullion coins.

Bullion coins, with its steadfast purchasing power, stood as a beacon of security amidst the unpredictable tides of economic change. And so, the people of the kingdom learned to value not just wealth, but the type of wealth that endures—

 A lesson they passed down through generations, ensuring their prosperity for years to come.

Governmental influence in currencies

Ah! The governments have a sneaky trick up their sleeves—they can keep printing more currencies and dilute its supply, like it’s going out of style! It’s like a never-ending magic trick where they make your hard-earned cash disappear into thin air.

But hold on! When it comes to gold and silver, they’re like the celebrities of money—they can’t be mass-produced! Their supply is limited, so they hold onto their value tighter than a cat with a mouse. No printing presses for these precious metals—just good old-fashioned scarcity keeping them in the money game!

From the graphs above it clarifies that money has a fixed purchasing power whereas as currencies cannot maintain a fixed purchasing power…

What are fiat Currencies?

Fiat currencies are like the rock stars of money—they get all the attention but they’re not backed by anything tangible like gold or silver. Instead, their value comes from the trust and confidence people have in the government that issues them. It’s like saying, “Hey, this paper or digital money is valuable because we all agree it is!” So, fiat currencies are essentially money by decree, backed by the authority of the issuing government rather than by a physical commodity.

Stay tuned for more posts on this blog…