One of the most mysterious changes that has been taking place over thousands of years is in the monetary system. It is mysterious because it is not a science and is dependent on the fickle whims of human nature and yet most business owners treat it as fixed and relatively stable. Humans are the ones that give money value or take it away. Many years ago you could exchange a sea shell for a cow or in modern days a piece of paper with green ink and a picture of a long dead United States president for oil. But again if the changes take place over long periods of time we don’t stop to think of the change as significant or worthy of our attention. Unless of course we are witness to the tipping point where the monetary system collapses or money changes form. After all what is money anyway? To really define money is a challenge. Money is more of a concept than anything. It is a product or an instrument that we use for numerous purposes. We use it to store our wealth, to build our wealth by investing it, we use it to exchange goods and services. It can change forms depending on the times and situations and locations of nations. It can be a paper promise of owner ship as in a stock or bond certificate or actual real tangible value held in the form of jewels or gold. It can come in whatever form is valued by society at a specific time and situation such as cigarettes in post-World War II Germany or Dutch Tulip bulbs in 1637. Money can change value without changing form such as when inflation happens (the dilution of value) through excessive bank money printing, for example what happened in the Weimar Republic of Germany after WW I when a wheel barrow of cash couldn’t buy a loaf of bread or in modern times the Reserve Bank of Zimbabwe Africa which was printing 100 trillion dollar notes that are worthless. It can also change value when the inherent promise of underlying value comes into question such as when a commodity futures contract or stock certificate change value.
Money can even be used as an instrument of war such as when Japan attacked the Chinese Yuan’s value before any shots were fired at the beginning of WW II. The strategy was to cripple the ability of China to pay for equipping an army and fighting a war. It also seems to have had something to do with the western banking system bankrupting the Soviet Union. So, the uses of money and the forms it may take are probably infinite! Waging economic warfare can be a national strategy or it can be business to business on a competitor through more competitive products or people or more efficient use of capital. Businesses can create their own completely different form of money through the value it creates with products and services.
As changing as the monetary system is, the question still needs to be asked not only about what forms of money are in vogue today but what will the world be using in the decades to come. Will it be US dollars, Euros, Chinese Yuan or maybe back to gold or seashells or some other form? It doesn’t matter whether you do or don’t have an international business, knowing that answer to that question will affect your wealth and the decisions you make! So, it pays to do your own learning and think innovatively about finance and the fickle, forms of money, if you don’t you could be holding all your money in the form of cigarettes when the no smoking sign comes on!
Money can even be used as an instrument of war such as when Japan attacked the Chinese Yuan’s value before any shots were fired at the beginning of WW II. The strategy was to cripple the ability of China to pay for equipping an army and fighting a war. It also seems to have had something to do with the western banking system bankrupting the Soviet Union. So, the uses of money and the forms it may take are probably infinite! Waging economic warfare can be a national strategy or it can be business to business on a competitor through more competitive products or people or more efficient use of capital. Businesses can create their own completely different form of money through the value it creates with products and services.
As changing as the monetary system is, the question still needs to be asked not only about what forms of money are in vogue today but what will the world be using in the decades to come. Will it be US dollars, Euros, Chinese Yuan or maybe back to gold or seashells or some other form? It doesn’t matter whether you do or don’t have an international business, knowing that answer to that question will affect your wealth and the decisions you make! So, it pays to do your own learning and think innovatively about finance and the fickle, forms of money, if you don’t you could be holding all your money in the form of cigarettes when the no smoking sign comes on!
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