Money, Money, Money. This is on the mind of everyone. whether they want more or are trying to avoid the need for greed. So what is this “thing” that dominates the minds of so many? What value does this have and what power over us does it have? How does this work? Do we need more of this? Let’s start with a simple example. Take a group of people 10 of them. They are in a room, sitting in a circle. They have one dollar bill among them. They pass this bill from one to the other once every hour. How much will they be making? One Dollar per hour. If they pass this ten times per hour they will be making 10 dollars per hour. One Hundred times per hour and each will be making one hundred dollars per hour. Still only one dollar bill. The only thing that has changed is how fast they move this from one person to the other. Now goods and services are moving the other way. This could be an apple, sandwich, hug and a kiss. When a man brings home his check to his wife, what does he get in return? a hug and a kiss. This is called the Velocity of money. The faster money moves through the economy the healthier the economy is. If one person gets nervous and thinks the bill may not come back to me and puts this bill in his pocket what happens? Game over. No money moving. So you have a special person who oversees the game and when one person hoards the money they come and take it out of his pocket and put it back into circulation. (taxman) Now you may say “But they do not keep the money? How can they be earning anything.” well there is 500 dollars for every person in the country. And what happens every week? You get 500 dollars and then you turn around then give this to someone else. You pay bills buy things. Then next week you get 500 dollars again.. Same money just money just moving from o0ne person to another.. You do not “keep” this money.
Posted on: Sat, 22 Jun 2013 03:29:46 +0000
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