3 Task 1 Money, Foreign Exchange, Finance.

 

Name: Luis Gerardo Calderón Alatorre

Nua: 116839

 

Watch the video, answer the following questions. 

1. How are money and currency defined?

The narrator tells us that the money is a tool for trading your time and it stores all of your economic energy, so you are able to use it whenever you are ready. On the other hand, he tells us that the currency is an imposter that steals our time and freedom (money).

2.                  What are the differences between currency and money? 

The currency is a medium of exchange, and it is portable and interchangeable etc. and money it's the same as currency but with the difference that it has one more characteristic “store of values”. Money could be anything (oil, silver, gold etc.) and it has the same value all over the world and currency is just a piece of paper or metal printed by a government that its value depends on the economic power of its government.

3.                  What are their most important characteristics?

Medium of exchange, portable, unit of account, fungible and divisible

4.                  What is a Fiat currency?

The Fiat currency is a currency created by the government by an official decree and it is stored in the Federal Reserve in the Central Bank of the USA.

5.                  What are its characteristics?

It is a claim check that it has no value for itself, the value is given by the government.

6.                  What is money and currency used for?

It is used in the interchange of economic value into a material value, by material value I mean goods like products and services.

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

Money is stored for a long period of time, so it gains value.

8.                  What was the currency used in the past?

People used salt, silver, gold and many other raw materials available.

9.                  What is the most beautiful way of money?

Money is divisible, permanent, store of value and it does not go away.

10.              What is a “solving system”?

Governments use the Fiat currencies in order to maintain control over the assets of the population. They do not use gold because its power is not defined by governments.

11.              What happens when governments expand the currency supplies?

Prices rise and this phenomenon is called inflation.

12.              What is barter?

The fair equivalents of money and goods. This was used a long time ago since there were no currencies people had to use this method of exchanging goods.

13.              What is Quantity of Easy? 

A global phenomenon that was created by governments by giving currency out of thin air to the banks. This crashed the world economy because the increased currency creation.

14.              What is the tendency of QEs around the world?

Currencies are increasing in number each day, so this means that everyday goods are becoming more and more expensive.

 

Write a final reflection on the topic, mentioning what were the most important aspects you learned. 

Debt was created way before the creation of the coin, so this means that back in the day where there were no currencies people had to try to match the equivalent of their money (gold, salt, etc.)  with the price of the goods. If we think of then we would imply that governments had no chance of controlling national economies because the value of goods were given by the people, not the governments. After the creation of the coin governments started creating their own currencies that would be as powerful as their economic power, the problem here is that the US currency is not sustained by anything, but it is still one of the most powerful currencies around the world. This is very frightening looking at it from an economical point of view because this means that there will come the time where the stock markets will crash, and the global economy will be shut down.