Fools Gold vs Real Money

Have you ever noticed that really cheap, imitation-gold jewelry turn green after a few years?  Well, here’s some fools gold for you that was actually PRINTED green to begin with:

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One of MANY currencies now it trouble, and being devalued at a pace faster than people can earn it, the greenback was, up until recently, considered the “gold standard” of currencies.  It’s still used as the default currency for world trade, but this is about to change and it WILL affect you.

Money vs Currency

While most people still see currency as being the same thing as money, this is clearly not the case.  Here are the specifications for money; all these things are REQUIRED:

Money has to be:

1. Portable

2. Durable

3. Divisible

4. Fungible

5. A store of Value

Let’s look at each of these in turn:

1. Portable: this speaks for itself; you have to be able to take it with you

2. Durable: it must be physically strong to handle some abuse

3. Divisible: it must be able to be split into smaller parts

4. Fungible: it must interchangeable, so one is directly equal to another

5. Store of value: it MUST retain is purchasing power throughout its existence

Money

Money, such as gold, silver, platinum, palladium etc. meets all of these criteria, including number 5.  For example, 3000 years ago, 1oz of gold would buy you about 350 loaves of bread.  Today, it will buy you about the same (depending on your choice of bread and shop that is).

Currency

Currencies (including the Greenback) meet the requirements of 1, 2, 3 and 4.  but does NOT meet the fifth.  In fact ALL currencies eventually resort to their INTRINSIC value, and that is ZERO.  The cost of the cotton to make the paper is actually DESTROYED when they put ink onto it.

I would suggest that the fools gold these days is CURRENCY!

Luke