What’s the definition of money/Carlos Pueblo
There is a documentary
produced by a German TV company about the
phenomena that
the rich make all the money. It is very interesting
program
conducting several interview with students and faculties of
the
University of Singen, Germany. One year, I was on my way from
Offenburg
passing through and stopped over at the small town to
continue my
visit of the Black Forest to Freiburg, Germany. Students are
not quite sure
of the question, what is the definition of money? The
documentary
posts a big question of excess money nowadays in the
world and
the rich make most of money. I asked my well learned son
Arthur about
the subject, what is money? He says that money is based
on the
national output, a reflection of a nation’s strength. I agree with
him and I
think that is a very simple and well definition of money.
In 1971, the
U.S. abandoned the gold standard and printed U.S. currency
freely of
some sort of percentage of the gross national product, similar to
GDP. The
Federal Government keeps on issuing bonds to borrow money
Worldwide and
the national debt blooming to a certain percentage of
GDP. The
whole world accept the U.S. Currency as a new standard by
purchasing low
interest bonds from the U.S. Treasury and free loan to
the U.S. by
keeping U.S. Dollars. The U.S. has been booming forever due
to the good
faith of the U.S. treasury. Everyone can purchase the goods
in the U.S.
with that value of dollars. I believe that there are several
economic
sound nations such as Germany, Japan, and the U.K. have the
same
advantage as well. Now, foreign currencies have been consolidated
with credit
cards and internet banking, etc.
The program
has pointed out an example of KKR to purchase Monsanto for
a certain
amount and re-sell it to a French company with a huge profit. It
is not fair
as the program indicates that the money exchanged with excess
money
available since de-regulation. I also agree, yet this is the new fact of
life in the
current world economics. We need to know this, KKR must distribute
the profit
to its shareholders, not necessary all rich shareowners but investors
like us with
mutual fund investment and also another big shareholder, the IRS.
It is why I
have preached so many decades on my carrier as an insurance agent
to save and
invest. Save and invest wisely for a long time, we call it duration,
will make
you very comfortable with the changing world economics.
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