What is Money? … says WHO?
If shells can be money, why can’t bananas join the currency club?
I mean, think about it — a banana’s peel is like the fanciest,
natural shell for the ‘naner’ inside. Riiight?
…Or are we just $MAD, and in $ANE…
..in…$ANE, meaning … with-IN, $ANITY,
{{inside the $tate of $anity?}}
Butt hay, let’s not go ‘bananas’ …. just yet!
Let’s peel back the concept of money, before we delve into this fruit-filled financial adVENTURE.
Money’s evolution has been a fascinating journey from barter systems to the diverse forms we have today, reflecting human ingenuity.
…..and who knows, maybe, By the end, we might ALL have a deeper appreciation for the humble banana’s potential, as a member of the weird currency club.
Money is an integral and ubiquitous force that keeps the gears of our modern world turning. We earn it, spend it, save it, and sometimes, we dream of having more. But have you ever paused to ponder the curious and captivating journey that money has embarked upon throughout history?
When we dive deep we realize that ‘Money’ is more than just a means to exchange value and keep track of it, its a reflection of the societal evolution of cultural value throughout the development of different kinds of civilizations over generations, which causes it to evolve like a “gene”,
or dare we say …. “MeMe”
(There we said it ….. “Money is a MeMe”)
From cowrie shells in Africa in the 14th century,
all the way to salt in Ancient Rome, where it was considered the preferable base currency of commodities markets,
and then onto cacao beans to pay off taxes in Mesoamerica!!Different cultures and societies have assigned unique values to various commodities as forms of money. Human’s ingenuity in the realm of currency has been nothing short of remarkable.
The ever-changing landscape of money reflects our adaptability and innovation as a species!
Let’s embark on this aPEELI-ing journey together, exploring just some of the financial instruments (‘fin-struments’) inside this constantly evolving global economy of scale, which we currently find ourselves in the transition.
“THE” 3 Primary Functions of Money:
Money has many functions in different parts of the world’s history, however it consistently has these THREE functions:
Medium of Exchange: This function refers to the ability of money to serve as a commonly accepted and easily transferable item or asset that people use to buy and sell goods and services. In a barter system, people would need to directly exchange goods and services, which could be cumbersome and impractical. Money simplifies this process by acting as an intermediary. When you want to purchase something, you exchange money for the item, and when you sell something, you receive money in exchange. Money as a medium of exchange makes transactions more efficient and allows for greater economic activity.
Unit of Account: Money serves as a standard unit of measurement for the value of goods, services, and assets. This function allows people to compare the prices of different items and determine their relative value. For example, if you want to buy a car and a house, both have different prices. Money provides a common measure to express and compare their values. This simplifies economic decision-making, budgeting, and financial planning. Without a unit of account, it would be challenging to make sense of the diverse values of various goods and services.
Store of Value: Money acts as a store of value when it retains its value over time. In other words, people can save money today and expect it to have roughly the same value in the future. This function allows individuals and businesses to store wealth and savings. Money is considered a stable store of value when it does not significantly erode due to factors like inflation or economic instability. It’s essential for people to have confidence that their money will hold its value over time, as it encourages saving and investment.
These three functions are fundamental to the concept of money and are crucial for the smooth functioning of modern economies. Money’s versatility as a medium of exchange, unit of account, and store of value makes it an essential tool for conducting everyday transactions, managing finances, and preserving wealth.
A Fourth Function:
In addition to the traditional functions, money, particularly in its cash form, has a FOURTH function, which applies an assessment attributed to the time value of money. Money not only facilitates transactions but also serves as a tool for financial planning and the management of future value.
The option of deferring a full payment to a future date, along with agreements to provide cash flow over a time period, is a significant addition to the utility of all money types, assuming there is a trusts system to apply these concepts.
Typically recorded on various forms of balance ledgers, a record of who owns what, and how much has always been an important core duty of any structured societal eco-system.
Types of Money
Commodity money retains its value by having utility baked in.
These monetary double agents are intrinsically valuable due to the
availability of their inherent utility or use the resource provides
Fiduciary money
Financial advisor that manages an investment account,
your money is tucked under their services and market positions, transferred arbitrarily from a balance ledger between you and the fiduciary and then from the fiduciary to their firms investments and positions of return.
Commercial paper is a usually some kind of fixed principle amount of an unsecured promissory note with a maturity date, longer than 3 full quarters. This is a common tool used by banking wizards to cast spells on the castes of society, ones they helped to create, with their “banana math”
Fiat money
This takes its most common form as government issued legal tender….. a unit of account that is designated and authorized by the issuing agency.
There is nothing intrinsically valuable backing up the derivative value attributed to fiat money, in its current form.
Various forms of money attempt to represent different spectrums of value from tangible resource-based value, onto more abstract trust-based value. All essentially aiming to represent and calculate the gross amount of money in an ecosystem according to currency units “unit of accounts”.
The unit of account, is a critical function of money, as it allows for standardization and comparison of value.
More Recognizable forms include physical cash, digital currencies,
and e-commerce balances, rebates, vouchers, coupons, redeemable reward points, etc.
With the rise of the digital information age, money has become increasingly abstract, with digital currencies, and loyalty programs.
Recorded value can manifest in countless forms,
even immovable stones in Micronesia, the famous Rai Stones;
[large immovable boulders that transferred ownership]
typically during certain arrangements, like marriages and business deals,
though they never moved from their resting spots.
Think about that for just a second…..
The Rai Stones exemplify the unique forms of money found in different cultures, reflecting their customs and traditions.
At the end of the day, you are going to be between a rock and hard place trying to eat golden boulders…. you want to know what you can eat, easy peasily?
BANANAS, thats right!! Hook line and sinker !!!
The practicality and universality of money make it an essential part of our lives, whether it’s a Rai Stone or a banana.Circling back to our opener …. IF Boulders & Salt … can be money,
why the PeeL should Bananas be left out in the time-tables of value.
The Banana deserves a spot, up there with Big Leagues & the Fig Leaves.
The concept of money is flexible, adaptable, and open to innovation, just like the humble banana.
The TRUE essence of money, is embedded in its capacity (or not) to turn perceived value into intrinsic value, which is a less subjective concept. This property makes it a medium for obtaining life’s essentials, as globalization disrupted the efficient bartering systems that have existed over thousands of years, such as the infamous ‘Silk Road’.
In any form or derivative its stands that Modern Money is a powerful force in shaping the world and the way we interact, trade, and connect with one another.
The Role of Central Banks
Central banks play a crucial role in shaping the monetary landscape, with the power to influence economies and markets by placing parameters and policies on the unit of account and what it is supposed to represent. These infamous financial institutions are responsible for setting a sustainable environment for healthy economic activity and stabilizing it to remain efficient.
Fractional reserve banking and its effects, including the creation of value on a ledger, are significant points of discussion. Blockchain systems are critical in addressing these issues and introducing immutable public ledgers to the financial world.
This topic is an extensive one, we will be dedicating many future Blog Posts and some Union Sponsored Programs around researching, teaching, and exploring these important topics. Lets put our BananaBrains together and develop ways to correct the obvious problems that our global society is facing, mainly because of the mismatch of principles. (pun intended, as always ;-))
Money is a reflection of our society’s values, and its transformation is an ongoing story worth exploring, and the future role of money will be a blend of tradition and technology. The capability of innovation to take place (or not ) will be at the center of shaping the global economic landscape.
However, from old money to new money … the goal remains the same…Everyone’s got to eat, so go grab A Banana!!~!!
…TO BE CONTINUED…
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