82,891
edits
Bitcoin is Venice: Difference between revisions
no edit summary
Amwelladmin (talk | contribs) No edit summary Tags: Mobile edit Mobile web edit |
Amwelladmin (talk | contribs) No edit summary Tags: Mobile edit Mobile web edit |
||
| Line 35: | Line 35: | ||
There is an important distinction here between ''holding'' currency and ''putting it in the bank''. When, and while, you hold it, for all intents and purposes money is not there. It is meaningless. Worthless. Valueless. (If you are robbed it only creates a (negative) value when it is taken away. Holding currency in person is taking actual capital off the table; withdrawing it from the market. Since capital’s value is a function of time, you would expect a capital instrument you have disengaged from the capital market to waste away, and so it does. Cash in your wallet attracts no interest, so relatively to the value of any particular thing, it depreciates over time. That is the consequence of inflation. | There is an important distinction here between ''holding'' currency and ''putting it in the bank''. When, and while, you hold it, for all intents and purposes money is not there. It is meaningless. Worthless. Valueless. (If you are robbed it only creates a (negative) value when it is taken away. Holding currency in person is taking actual capital off the table; withdrawing it from the market. Since capital’s value is a function of time, you would expect a capital instrument you have disengaged from the capital market to waste away, and so it does. Cash in your wallet attracts no interest, so relatively to the value of any particular thing, it depreciates over time. That is the consequence of inflation. | ||
Cash you put in the bank ''is'' invested. With the bank. The bank paid you interest — usually not much — but it pays you a return for your investment in its capital. It must sit on some of the cash its customers give it, but that capital reserve, too, will waste away. The rest it will punt out to its borrowers. It's bankers will find creative ways of punting out as much as humanly possible, to increase shareholder return. This is the | Cash you put in the bank ''is'' invested. With the bank. The bank paid you interest — usually not much — but it pays you a return for your investment in its capital. It must sit on some of the cash its customers give it, but that capital reserve, too, will waste away. The rest it will punt out to its borrowers. It's bankers will find creative ways of punting out as much as humanly possible, to increase shareholder return. This is the bank’s leverage ratio. Nowadays the supply of actual printed money that can waste away in your pocket is dwindling, and now most currency exists electronically on a banks electronic ledger, but the difference between the liabilities a bank has to its depositors - a positive number — and the claims for repayment it has against its borrowers — a negative number — represents “under the mattress” cash. A negative energy ''until you have to give it away'' | ||
But let's not get distracted. That cash flies around the system | But let's not get distracted. That cash flies around the system, perpetually depreciating as it does it is a hot potato — everyone wants to pass it on — invest it — as quickly as they can, as it weighs on anyone who holds it like a dark energy. The best thing to do is to convert it into — in the vernacular , 1“buy” — something that will hold its value. An asset. | ||