Money, Foreing Exchange and Finance

Task 1 Money, Foreign Exchange, Finance

Watch the video, answer the following questions. 

1. How are money and currency defined?

Money is defined as a tool for trading your time. It is a container to store your economic energy until you are ready to deploy it

Currency is defined as an imposter who steals your two most valuable assets; time and freedom.

2. What are the differences between currency and money? 

Currency is a medium of exchange for goods and services. Money is a unified method of exchange for goods and services.

Currency is just a medium that we keep in our pockets to increase our purchasing power and to make day to day payments in our lives. Money is the actual value of goods or services that are traded for.

3. What are their most important characteristics?

Currency: Medium of exchange, a unit of account, durable, divisible, portable and fungible.

Money: Is all the same things (medium of exchange, a unit of account, durable, divisible, portable and fungible) but with a plus: store of value.

4. What is a Fiat currency?

Is a currency that exists at the dictate or by fiat from a government. They have their printing presses and the paper money rolls of the printing presses.  They give it the fiat designation which then makes the currency official. It becomes currency when they have a cult meeting at the Federal Open Market Committee. The main goals of this committee are to promote high employment, economic growth, and price stability.

5. What are its characteristics?

An special sign.

6. What is money and currency used for?

It is an instrument to exchange money and currency for things that we want and need.

7. What does “store of value” refer to?

A store of value is an asset, commodity, or currency that can be saved, retrieved, and exchanged in the future without deteriorating in value.

8. What was the currency used in the past?

Gold or silver as a unified tool to exchange it for sugar, salt, food or something else. 

9. What is the most beautiful way of money?

Money is divisible and permanent and it does not go away.

10. What is a “solving system”?

Governments don't like gold at present because they are getting away with the fiat currencies, and they will do everything they can to discredit it as an asset class. There is the fear that maybe gold will be imposed on the system.

11. What happens when governments expand the currency supplies?

Inflation is an expansion of the currency supply, so as we could see inflation is what happens when the government expands the currency supplies. If you expand the currency supply,  prices will rise.

12. What is barter?

The way that they  used to exchange goods and services for others as equivalents. Eventually, it turns out complicated so that’s why money became portable and divisible as a medium exchange.

13. What is Quantity of Easy? 

It is just a smoke and mirrors term for currency creation. Just like a myth.

14. What is the tendency of QEs around the world?

It started with the banking bailouts back in 2009. This currency was created out of thin air and then given to the banks who paid themselves record bonuses in reward for crashing the world economy.

Write a final reflection on the topic, mentioning what were the most important aspects you learned

I really enjoyed this video, I think is really interesting how every part of the video is explained and how learning about this topics makes me have a different perspective about economy, money and the way that it moves. Inflation is a phenomenon very mind blowing to me because it affects to everyone in all the ambits; the truth is I’ve been studying about this since I started my career and now with this video was so much easier to understand inflation, money and how it affects to the world. 

In the other hand, having a precise knowledge about the differences about money and currency are really important in order to know how the economy moves, which ones are the pros and cons and also to have a better perception of the money.