What is Fiat Money? Here I would like to say a few words about the traditional financial system. Money Money
If you do not find what you are looking for then just ask. You may have heard that.
Direct exchange is not convenient. A goat can not be exchanged for a cabbage.
The value is not fair. To balance the value (for example, a goat for a hundred cabbages)
If so, the goat owner will not need to use a hundred cabbages. this
Because direct exchange is not a commercial system, it has become a necessity
They were in the sense of exchange. Everyone needs to be able to eat
We have to produce everything ourselves. ပေါက် တူး၊ I know how to make shovels, so I made a blacksmith
You can’t just sit down and do shovels. The resulting hole Spoon with food
You have to farm yourself because the exchange is not convenient. Because of this, human beings
General development is also slow.
Later, some people agreed to exchange what they agreed on.
From region to region; I’m not sure if I’m going to be able to do that. The medium used is different. For example:
A cauliflower can be exchanged for a rare sea urchin and a goat can be exchanged for a hundred rupees.
If many people hold on to it, The goat owner had to exchange a bottle of his milk for a goat
Now you can get back the cabbage you need with the money you got. One of his goats, believing he wanted to make cabbage
You do not have to give it all up. In this way, the currency that can exchange comes out
It appears.
With this kind of neutral system, people will be able to work around their skills.
ပေါက် တူး၊ An expert in shoveling is a master of blacksmithing and digging.
Lots of shovels were made, What you need to eat and drink with the help you get
Now that it can be replaced, he no longer has to farm. Another shovel
Those who need it no longer have to build their own forge for a hole You can now get the necessary trenches and trenches that can be used to sell farm produce. This way
Focusing on skills increases productivity and local development and livelihoods
Standards are rising rapidly.
Gold and silver continue to use interchangeably. Gold and silver
Is rare Rough Beautiful It is very valuable because it has many customizable properties.
Such precious gold and silver are made into small pieces. Can be exchanged for coins
They use their hands as currency.
A goldsmith’s shop offers you gold coins to make coins at a florist shop.
We issue paper handouts. Guaranteed to return the gold coin with it
It means So even if you don’t have a coin ready to buy, you can still use that piece of paper
You can pay. The handmaiden also believed that gold coins could be recovered with this paper
It is no longer a coin-operated exchange, it has become a florist’s paper. That
From here, things get trickier, and this is where the true bankruptcy begins!
Yes. The frame paper issued by the florist turned into paper money. The florist is neutral
It has become a bank.
17th-century gold standard, but only for banknotes
The monetary system used has become quite widespread. Banknotes issued by banks
And the equivalent of gold reserves stored in large safes and, if necessary, banknotes at any time.
It used with the guarantee that it exchanged for gold. Gold in the extraordinary calendar
Instead, the standard is money. Sterling Silver is the currency of the United Kingdom
It comes from the standard production of silver ore. One pound Ster is sterling
It means the equivalent of one pound of silver.Banks only reserve the equivalent of gold and distribute the equivalent banknotes.
It said that it has the same real value as gold. But later
So with the rapid economic growth, Scarcity of gold; Banknote Requirements
With the rise, banknotes could no longer be linked to the reserve gold, and the bank’s securities,
They have to issue with the government’s guarantee. The United States was under President Nixon
In 1971, the dollar abolished from gold.
Such government authority alone. Fiat Money or Fiat Money
It is called Fiat Currency. There is no real value in this currency. Many value
It is valuable only if it is accepted. Because the government has ordered it to be valuable
They are valuable. The authority to print this banknote is the relevant authority
We have There is no limit to laughter. The more new banknotes issued, the more of that money
Inflation is rising. Inflation is the decline in the value of money. For example, if you used to have 100 money
You can buy a plate of bread, but you can not. 100 kyats
However, the purchasing power of that money reduced inflation
Of course. Excessive bloating is dangerous, but moderate bloating needed
Scientists have done research. The value of money is the value of deflation
If it goes up, people will save money without spending it. If you save on the depreciation of money, that money
It will automatically depreciate. We have to invest more when we do not want it. More
And then you have to use it. So strong circulation and economic growth
Rates also said to be helpful.
So government officials tend to put policies in place to keep inflation in check.
There are The average annual inflation rate should be around 2%.
Grants issued during the 2008 financial crisis, as mentioned above
To be able to pay off loans; Inflation in the United States due to the printing of banknotes The rate was as high as 3.8%. It swells almost twice as much as it should. အု (2020)
Around the same time as the Covid-19 epidemic, similar subsidies issued
US dollar inflation to reach 5% in 2021
The bottom line is that the Fiat Money we currently use is a medium of exchange
It used for storage, but not as a store of value (Fiat Money)
It said that it is not appropriate. What are the interest rates that can help keep inflation in check?
Purchasing Power decreases over time. In addition, your property values
It depends on the policy of the government and the performance of the banks.