cashless society

How Close Are We To A Cashless Society?

The move to a cashless society is being implemented slowly in a series of incremental steps. Global governments are starting to place restrictions on the use of cash for what they say are security reasons.  But in reality it is to restrict individual privacy and independence.  After all, cash is anonymous. You leave no digital…

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financial derivatives

Is Your Bank Trading in Financial Derivatives?

Financial derivatives are contracts between two parties whose value is determined by changes in the value of an underlying asset. Those assets could be stocks, bonds, currencies or commodities (such as oil, wheat, precious metals). Most of these contracts are traded over the counter, where details about pricing and risk measurement are not available to…

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Fractional Reserve Banking Infographic

Fractional Reserve Banking is the banking system most countries use today. It requires banks to hold only a fraction of the money their customers deposit. That amount is called the reserve requirement, and in most countries the central bank decides the percentage or ratio.   Banks can then loan the rest of the deposits they…

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How Inflation Affects Your Cost of Living

Many people think of inflation as rising prices. Well, not exactly. Inflation is not goods and services becoming more expensive. It’s really the money that we use to buy those goods is losing value. When more money is printed, the dollars we already hold become less valuable because there are not enough goods and services…

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national debt

U.S. National Debt: Visualizing $18 Trillion

For most of us, it’s hard to conceptualize the U.S. national debt of $18 trillion in debt  (and an additional $80+ trillion for unfunded liabilities such as Social Security, Medicare). We hear economists and politicians throwing these numbers around with such ease that we become lulled into complacency about the magnitude of that number.  It…

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fiat currency

Is Our Fiat Money Backed by Gold?

When my son was in third grade, I joined his class field trip to watch fiat money being printed at the U.S. Treasury. As I observed them printing dollars I wondered if his teacher knew what gave our dollar its value. When asked, to my surprise, he knew!  “The fact that we believe it has…

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good money

Four Characteristics of Good Money

What constitutes “good money”…  A U.S. Dollar?   The British Pound?   The Chinese Yuan? By proper definition good money must include two functions: a store of value and a medium of exchange. But the idea of what characterizes good money goes back to the days of Aristotle, the Greek philosopher (384 BC – 322…

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reserve currency

The Dominant World’s Reserve Currency

Have you ever wondered how the Federal Reserve is able to print our dollars without producing anything to back it up? It’s one of the advantages of being the world’s dominate reserve currency.  But how does it all work? Here’s a list of commonly asked questions about reserve currencies and my stab at simplifying the…

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The Hidden Secrets of Our Money

Have you ever wondered how we got so far in debt as a nation? What is the debt ceiling and what happens if we don’t continue to raise it? Why is our country printing more and more paper currency? What is the Federal Reserve’s role? Mike Maloney, noted author on the history of money, which…

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