Dear reader,
Money is the biggest driving force in the world. Money gives you a social status, let's you follow your dreams or it can ruin your dreams. Some say money gives you joy and others say money destroys your happiness. What ever side and your goal is with money, you need to understand it.
What do you know about money? How do you use money? What can you do for money? Can money really make you happy? These are some of the questions you need to ask yourself. For everyone money means a different thing and it serves a different purpose. Today I will take you on a ride about money and hopefully you will learn a few things.
History of money:
Since the day that we are born we know the word money. It is the most ancient part of our history. Thousands of years ago people paid for goods and services with gold and silver. Today we have bitcoins that allow us to pay for goods and services. In the time line between gold and bitcoin a lot has happened and changed.
I am going to take you back a century, it is 1920. The dollar is the world reserve currency. This means that all the currencies in the world are traded against the price of the dollar. Within Europe every country has it's own currency and central bank. During world war II Europe paid the United States for it's good with gold. After the war ended the Brettenwoods agreement was signed. This means that every currency was backed by the dollar and the dollar would be backed by gold at $35,- per ounce. In 1972 President Nixon took the dollar off of the gold standard. This means that every country can print as much money as they want without having the equal amount of gold in storage.
2008 Financial crisis:
In 2008 the world had it's latest financial crisis. Large investment banks where buying up CDO's. These are basically your mortages. Who doesn't pay there mortage? Well a lot of people couldn't. So this large investment banks had toxic assets on their balance sheets that where basically worthless. The federal reserve had to come in and back the big banks before there was no more money left.
From 2008 the federal reserve has been printing money, this is called flooding the market. After 2008 we have seen an huge increase in debt as well in money printing. The federal reserve is allowed to print as much money as they wish. The only problem is with every dollar bill the federal reserve prints the less every dollar bill becomes. Since the 1970's up until now the federal reserve has been printing money and the dollar has lost nearly 95% of it's value. That means that all you have in your pocket are just pieces of paper with faces on it.
2020 and beyond:
What the next decade would hold for us is a great question. If our monetary policy would be able to keep printing and doing what it always does or will there be a change and turn around in our financial system? Would we go back to the gold standard? Is Bitcoin going to rule the world? I don't have the answer to these questions unfortunately, neither am I an financial adviser or expert. I listen to both side of the stories to see for my self what is true and what is false.
There is something going to happen, something needs to happen. The stock market is in it's 11th year bull market and can't be stopped. The interest rates are worldwide nearly at zero or some even bellow zero. This means no one wants your money because they have printed so much of it. Some of the biggest investors of our life time are sitting on billion dollar piles of cash just to wait until it all comes crashing down.
What can you do?:
The best thing to do is become financial educated. There are hundreds of books on financial education, money and investing. Start looking for your self on different platforms what they are saying about the current market. Listen to both sides of the story. Do you wish to start investing? Be smart and learn from others. Prepare yourself as well as you can because the next financial crisis is around the corner and you want to be able to win when the market goes up but also when it comes crashing down.
If you have any questions, comments or suggestions, please let me know.
Thank you for reading,
Franklin, Moments2Success
Money is the biggest driving force in the world. Money gives you a social status, let's you follow your dreams or it can ruin your dreams. Some say money gives you joy and others say money destroys your happiness. What ever side and your goal is with money, you need to understand it.
What do you know about money? How do you use money? What can you do for money? Can money really make you happy? These are some of the questions you need to ask yourself. For everyone money means a different thing and it serves a different purpose. Today I will take you on a ride about money and hopefully you will learn a few things.
History of money:
Since the day that we are born we know the word money. It is the most ancient part of our history. Thousands of years ago people paid for goods and services with gold and silver. Today we have bitcoins that allow us to pay for goods and services. In the time line between gold and bitcoin a lot has happened and changed.
I am going to take you back a century, it is 1920. The dollar is the world reserve currency. This means that all the currencies in the world are traded against the price of the dollar. Within Europe every country has it's own currency and central bank. During world war II Europe paid the United States for it's good with gold. After the war ended the Brettenwoods agreement was signed. This means that every currency was backed by the dollar and the dollar would be backed by gold at $35,- per ounce. In 1972 President Nixon took the dollar off of the gold standard. This means that every country can print as much money as they want without having the equal amount of gold in storage.
2008 Financial crisis:
In 2008 the world had it's latest financial crisis. Large investment banks where buying up CDO's. These are basically your mortages. Who doesn't pay there mortage? Well a lot of people couldn't. So this large investment banks had toxic assets on their balance sheets that where basically worthless. The federal reserve had to come in and back the big banks before there was no more money left.
From 2008 the federal reserve has been printing money, this is called flooding the market. After 2008 we have seen an huge increase in debt as well in money printing. The federal reserve is allowed to print as much money as they wish. The only problem is with every dollar bill the federal reserve prints the less every dollar bill becomes. Since the 1970's up until now the federal reserve has been printing money and the dollar has lost nearly 95% of it's value. That means that all you have in your pocket are just pieces of paper with faces on it.
2020 and beyond:
What the next decade would hold for us is a great question. If our monetary policy would be able to keep printing and doing what it always does or will there be a change and turn around in our financial system? Would we go back to the gold standard? Is Bitcoin going to rule the world? I don't have the answer to these questions unfortunately, neither am I an financial adviser or expert. I listen to both side of the stories to see for my self what is true and what is false.
There is something going to happen, something needs to happen. The stock market is in it's 11th year bull market and can't be stopped. The interest rates are worldwide nearly at zero or some even bellow zero. This means no one wants your money because they have printed so much of it. Some of the biggest investors of our life time are sitting on billion dollar piles of cash just to wait until it all comes crashing down.
What can you do?:
The best thing to do is become financial educated. There are hundreds of books on financial education, money and investing. Start looking for your self on different platforms what they are saying about the current market. Listen to both sides of the story. Do you wish to start investing? Be smart and learn from others. Prepare yourself as well as you can because the next financial crisis is around the corner and you want to be able to win when the market goes up but also when it comes crashing down.
If you have any questions, comments or suggestions, please let me know.
Thank you for reading,
Franklin, Moments2Success
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