8- Credit Theory of Money (Part II)

In the Part I of Credit Theory of Money, we have seen a few things: When we buy, we acquire debts; when we sell, we acquire credits. In other words, when we buy, we become debtors; when we sell, we become creditors.  We can use the credit we acquire from somebody to redeem the debtsContinue reading “8- Credit Theory of Money (Part II)”

4 – State Theory of Money

Continue from the first article titled “1 – Metallic Theory of Money”, it’s said that people accept the one-dollar gold coin as a payment for the goods and services they offered for other reason, but certainly not because of the intrinsic value of the gold coin (i.e not because the gold used to mint the one-dollar gold coin worth 1Continue reading “4 – State Theory of Money”

3 – Money doesn’t MOVE! (Cont’)

Now we have seen how money “moves” between banks within a country, now let’s see how money moves “between” countries for example when a Malaysian firm, Proton Inc. wanted to buy high-tech production machines from a US manufacturer, Tera Inc.  The total amount to pay is USD 25,000.  Let’s say Proton Inc. has a bankContinue reading “3 – Money doesn’t MOVE! (Cont’)”

2- Money doesn’t MOVE!

When you log in to your online banking account and make a RM100 transfer to your friend, how does the money actually get “transferred” from your bank account to your friend’s bank account? How is money “moved” from your bank account to your friend’s bank account? To explain this, let’s assume Alice wants to transferContinue reading “2- Money doesn’t MOVE!”

1- Money and Metal – The Metallic Theory of Money

In today’s world, whenever you see a government or a country collapsed due to war, you’ll see the citizens of the country scrambled to ditch all their savings of money in exchange for food, and they save food (or even gold) instead of money. Why? Why the citizens ditch their money as if their hard-earnedContinue reading “1- Money and Metal – The Metallic Theory of Money”