Who moved my money value?

Who moved my money value?

Last night I discussed about “whether Bitcoin is alternate currency – Ideal”. Today I just expressed with interesting topic which is “who moved my money value?"

12 years ago, I was not aware of money value. my parents tuned the channel, at particular time to watch the gold value- I was not amazed, coz I thought this was just regular update. My mom and dad usually followed up with the gold rate. They had spent huge amount of money for gold purchase. I wondered why they spent long savings for gold. It was happened not only me. I think so….. After 5 years I realized the amount of gold not only moved the value of money also. I thought the gold and money was parallel trend. But later I realized it was not parallel but interlinked. The value of money decreases and the gold value increases year to year.      

 

I wanted to know how gold value & money value changed during the years.Why our currency and the gold value is not parallel? How money value & gold value is interlinked with one another? It is my country why govt not printed money high quantity? How corruptions decrease my money value? Why money always circulate why not ideal?  Answers for the above questions are discussed below:

 

I am going to explain all things with a simple example:

 

The physical currency in all over the world is probably convenient. Nowadays most of the high denomination currencies are just ideal or sleep. It just creates extra circulation of the new currency. Concept behind this- is hidden for most of us. Now I am going to revival the concept, I am not going too long to explain the theory but simple.

 

I explain with an example: 3 guys from a street, one of them run a shop; another one of them run a business unit, another one is from worker. All of them are interlinked with one another. The Worker is working in business unit & the shop that purchased from that unit. Now 50rs is distributing each one of them. Now shop is purchasing from unit for 50 Rs. Unit is now having 100 Rs, and 50 Rs goes to worker- again it will go to shop it is simply called- Money circulation.

 

Now consider another situation if anyone interfered with above cycle like one will hide the money –corruption.

 

And the business unit wants profit, it slightly increasing price, shop vis a vis, the worker remains same. The unit earns more and the workers earn less. – Inequality of distribution of profit.

 

Now govt wants to increases the production. So it needs extra circulation- so extra money circulated – Central bank wants to open some banks to circulate money

 

Inflation created through loans and subsidies – banks & govt org.

 

Person earning money but they wants extra for their needs – debts.

 

Central bank fix rate to banks and banks fix rate to customers for loans- Interest Rate

 

Inflation- it circulates more money than earlier, now it will another 50 Rs totally 200 for three. Unit wants some materials from another country –Trade.

 

So unit will pay money in the form of Dollars- World bank & IMF. Govt not having dollar to pay, so we make some agreement with WB & IMF after that the orgs will offers Dollar for our currency with INTEREST RATE- SDR.

 

However we will pay more in terms to doller- it will pressurize us to increase the profit of the unit. So unit will find the some cheap worker that may be in the another country, already our country debt from others so it rises interest rates and tax. Now unit will be on pressure so it find another cheap tax country for setup the unit- GLOBALIZATION.

 

Initially we brought Rs 100 for 100 Doller with inflate the currency now the demand for the Doller increased so the interest rate also increased. Now we again wants Doller some doller for further development. Now they offer for decressing our currency value. Now it goes Rs 100 for 80 Dollars. We accept and again we inflate the currency and the same process going on.

 

Import is going on and we need some money in terms of Dollars for repay the debt to international organization, we produce things which is overflow, that thing not need for our country so we will sell to another country – EXPORTS.

 

We will not sell the all products to one country instead of other country who needs so one framework control this is called – WTO.

 

The entire framework controlled and some recourses like crude oil only with OPEC and gold. The import over export - TRADE DEFICIT.

 

We planned for expenditure and profit sharing – BUDGET.

 

If expenditure over profit – FISCAL DEFICIT.

 

 I explained above for only three persons just think about country how ideal money plays our life. The one rupee is same at 1947 & 2016 but the purchasing power is varied during decades. “You earn money with your hard work, keep some liquidity with you but not ideal”.

 

Ideal money always wants us to protect. So it will not earning – it just sleep or occupying the space. I always favors for “don’t work for money, let it work for you”.