What is The Difference Between Currency And True Money?
Author:Tom Genot
Currency has been defined as a circulating medium of exchange, used as an intermediary in trade, so to avoid the use of a barter system. The benefits and usefulness of currencies include; being a unit of account, or standard measurement of value. Other key factors include; durability, divisibility, ease of transportation and being fungible, or capable of mutual substitution.
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What is The Difference Between Currency And True Money?[/caption]True Money however, is defined as having all the attributes above, however with one major difference. Money is also a store of true value. Paper currency is actually designed to lose value while true money is designed both to hold and store value. Gold and silver meet these special requirements and have been true money for over 5,000 years, thus they will forever be in demand.
Fiat currency is not true or real money; it only has value because of government regulation or law. The word fiat is actually derived from the Latin word meaning ‘let it be done\'. Thus fiat money is actually established by government decrees. In America, no fiat currency has ever survived more that 40 years, since its start in America, during the days of the Continental Congress, before the Revolutionary War. America\'s current fiat system is the dollar system which started in 1971. It has now in-place over 41 years thus; now it\'s already overdue for failure.
Debasement of currencies is accomplished by nations. Through which, additional fiat money is created then added into the existing nation\'s money supply. Currency debasement is just another fancy word for money expansion. The end result of this expansion, through central bank efforts to debase currencies, always ends up with inflation. The more the paper currency is debased, the greater inflation upon the society becomes. This further drives up the real costs of goods and services, while lowering the purchasing power of the nation\'s currency in real-time.
How can an investor protect oneself from further monetary debasement and inflation? The answer is actually thousands of year\'s old, own gold and silver. Both these monetary metals protect your assets from currency de-basement and because they are real stores of value. They can also protect you from the collapse of currency regardless if it comes from inflation, deflation or the destruction of the paper currency itself, through hyperinflation.
Holding these two precious metals in physical form outside the banking systems of the world, allows you ultimate freedom and complete control. These precious metals also become the best possible insurance for asset protection or hedging that money could ever buy. The biggest reason is due to the unique characteristics these precious metals hold. Always allowing for them to consistently seek their true value, regardless of any economic conditions.
Tom Genot –
Article Source: http://www.articlesbase.com/banking-articles/what-is-the-difference-between-currency-and-true-money-6270459.html
About the Author
Informational news, books, articles and videos on investing in gold and silver and where the best places are to buy it. You will also find informational resources to educate you on alternate forms of investing and information on preparedness, for preparing and protecting you, your family and your assets from the pending economic crises and destruction of the US dollar. Author Tom Genot provides information and resources helpful to everyone. Insure you\'re prepared, while time is still on your side. Check us out at www.coinbullion.net.
