Money vs Currency: Life Lessons For George Episode 4

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So here we are again George with another lesson that is probably the most important lesson of them all, money vs currency.

Understanding the differences between money and currency will set you apart from most of society.

At the time of writing this letter, the greatest investment opportunity in history is knocking on our door. I have chosen to open it and in the years to come you, mum and any future brothers or sister you have will reap the full rewards of it!

For the past 2,400 years a pattern has continually repeated in which governments and central banks debase and dilute their money supply until a point where the general populace and the collective mind of the country begin to feel that something isn’t right.

Most people feel that way today!

Throughout the history of civilisations an epic battle has always been waged. It is an unseen battle, unknown or misunderstood by most people it affects.

Yet, we all feel the effects of this battle in our daily lives. Whether it be at the supermarket when you notice that the price of milk and bread have rose more than it was last time, or when your heating bill has unexpectedly jumped by £50, you are feeling the effects of this hidden battle.

This battle is money vs currency and it truly is a battle of the ages.

Most often this battle takes place between gold and silver, and currencies that supposedly represent the value of gold and silver. Inevitably people always think that currency will win.

They have the same blind faith everytime, but in the end, #Gold and #Silver always revalue themselves and always win.

To understand how gold and silver periodically revalue, you first need to know the differences between money and currency.

Money vs Currency: The dirty little Secret

 

 
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A lot of people think currency is money. For instance, when someone gives you some cash (Sadly I have a funny feeling that you will not see cash when you are old enough to understand what I have written here) but most people presumably think of cash as money. It is not. Cash is simply a currency, a medium of exchange that you can use to purchase something that has value, what we would call an asset.

Currency originates from the word current. A current must keep moving or else it will die (think of switching off a light) a currency does not store value, rather it is a medium of exchange whereby you can transfer value from one asset to another.

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Money, unlike currency, has value within itself. Money is always a currency, because it can be used to purchase other items that have value, but as I’ve already explained above, currency is not always money because it doesn’t have value in itself. If you are having trouble grasping this, just think of a £50 note (I will show you what this looks like, if there is no such thing as cash when you read this) Do you think that paper is worth £50?

The answer is of course, NO. That paper simply represents value that is store somewhere else – or at least it used to be before our money became currency.

At a later date I will explain the history of our currency and the gold standard, but for now, know that the Pound Sterling is backed by nothing other than thin air and the good old faith and belief that it has value. The moment that faith and belief is lost it becomes worthless. In short, our central bank (which is privately owned) has the ability to create and has been creating money at will without anything to back it up.

Oh but it gets better, the central bank, then lends this currency it has created out of nothing to our government at interest. You might call this counterfeiting; the government calls it fiscal policy. The whole thing is what we refer to as fiat currency.

Fiat currency is another lesson altogether so for now I will leave it there but just understand the differences between currency vs money.

My hope is that by the time you fully understand this, maybe society will have learnt from history and this will not happen again in your life time.

Lots of love Dad x x x

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