Tuesday, 7 June 2016

Paper Paper tell me who is the Hero?

There were men. They produced Goods and services. They exchanged these according to their needs.

There were men. They were intelligent. They realised that not all Goods and Services have the same value. They sold their Goods and services for Valuable metals.

There were men. They traveled a long way to make a fortune. They realised carrying heavy luggage consisting of valuable metals is tiring and prone to theft.

There were men. They worked with iron and steel. They sensed a need. They provided these travelers or anyone in need a place to deposit their valuable metals in a safe and issued a Depository receipt.

There were men. They just deposited valuable metals but never bothered to withdraw. They instead found it convenient to exchange receipts as they were 'backed by valuable metals'.

There were men. They looked at the probability of these account holders squaring off the accounts and found it minimal. They printed fake receipts and issued to those in need charging a nominal interest. Before anyone realised the system was full of fake receipts.

There were men. They were sensible enough to realise the snowballing danger. They regulated they printing of these notes through Central Banks empowering them with the sole authority to print notes.

There were men. They assumed the role of a Big brother and kept printing notes with no real value back up.

There were men who realised that their neighbour's Five Rupee coin could be used to make Shaving Blades and could be sold with a profit of Seven Rupees (or higher per coin)

Not Manufacturing! Not Services!


There are historically troubled men. They still believe that the currency notes they hold has value. They refuse to let go of the system they had started. They sold Goods for Paper! They have Trillions of such paper receipts! They boast of one of the highest Purchasing Power but wonder with what?

There are common men who hold these Green notes so dearly that a kid wondered and asked, 'Paper Paper tell me who is the Hero? Is it you with no Value or is it Gold with real value?'

Pro - Tip: With an inflation of 10 % it nearly takes 7.27 years for prices to double. So, any investment you make keep this principle and Rule of 72 in mind.

Suggested Reading:


One - Month Money is a good book and definitely an eye opener.

Some images of inflation and how 'Paper' currency was treated

Paper - with or without value?

Zimbabwe Billionaires!
Banana Money - Issued when Japan occupied Singapore
Gold Rush - Chinese Hyperinflation

Hungary - Notes being swept

Invasion Money - Rangoon Streets
Paper cash used as Firewood




Sources: All images are sourced. Rights vest with the respective content owners listed below.




Why can't we just print money to pay off debt?


Banana Money

Chinese Tale

South Sudan - Inflation

https://en.wikipedia.org/wiki/Hyperinflation

Invasion Money








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