Actividad 3: Business Communication

 

Business Communication

Actividad 3. 

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 a deceitful imposter that is stealing your two most valuable assets, our time, and our freedom. 

2. What are the differences between currency and money? 

As I understand, the currency is the instrument of exchange and it could be whatever as Egyptians used gold and silver as a way to exchange 5000 thousand years ago. We could say that they were the pioneers of the currency. And money  And money is a unified method of exchange for goods and services, we don't need to guess their value like gold or silver. We know that 10 dollars are equivalent to 10 dollars.

3. What are their most important characteristics?

Currency: Medium of exchange, A unit of account, Durable, Divisible, Portable, Fungible. 

Money: Are all the same things (Medium of exchange, A unit of account, Durable, Divisible, Portable, 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 is just worthless paper at first, but when they give it the special sign and they have a cult meeting at the Federal Open Market Committee meetings it suddenly becomes currency. 

5. What are its characteristics?

The principal one is the special sign because without it it is just paper. Nothing else. 

6. What are money and currency used for?

As we think, it is an instrument to exchange money or currency for things that we want and need. 

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

Money must be a store of value and maintain its purchasing power over long periods of time. 

8. What was the currency used in the past?

Currency was used as an instrument of exchange, they used to use gold or solver as a unified tool to exchange it for Petroleo, sugar, salt, anything you could think about. 

9. What is the most beautiful way of money?

I was thinking about the scene where a man compares IVY League teachers with kids, and kids decide that the most beautiful way of money is a solid gold American Eagle one-ounce coin, because it is different from just common paper. 

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, eventually prices will rise. 

12. What is barter?

A fair exchange, for example, coconuts and fish. They used to exchange goods and services for others as equivalents. But it was complicated so we had to invent money to be a divisible, portable medium of exchange. 

13. What is Quantity of Easy? 

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

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 have already watched this video, in an economy class and it is really interesting how they explain every single part of the video; Inflation is a phenomenon really interesting to me because it could be catastrophic taking us to a worldwide economic crisis if we don't act as quick as possible. So I really enjoyed how they explained how inflation works. It was so easy to understand. 

I also enjoyed learning about the differences between money and currency. I am studying something related and I did not have an idea of the differences between these two terms.