We often see money as a simple medium of exchange, as a means to accumulate wealth, power… and we fail to realize that in the end, money is nothing more than potential energy that we can accumulate. But if we don’t use it, if we don’t give it the value and care it deserves, it transforms and we end up losing it.
Its effect is just as the second “law/principle” of thermodynamics states, the Entropy: Any system we leave at rest will, over time, descend into chaos until it reaches a point of equilibrium (greater disorder of the system). This effect is identical when we talk about money as well as the “first principle” we talked about on the previous article.
When an investor or saver loses money, there is another party that gains. Similarly (in a very simplified way), if a government prints money, it leads to the devaluation of its own currency, and this results in the currency losing value to the extent that the monetary base still maintains its balance with respect to its overall value. But this is not the topic of our conversation today.
Continuing with the fact that money is nothing more than potential energy in our hands, and we acknowledge that it’s just a simple “paper” until the time comes to give it a purpose, the main problem that gives rise to this article appears. We want to control it, make it grow, and increase our wealth.
Even in the times of the Phoenicians, they understood very well what they had created. They introduced a suitable metal weight that could be used as an exchange item among different cultures, from the Mediterranean to India. Over the coming centuries, this concept evolved into an industry in itself where, like in any industry, the pursuit of profit is central. Money ceased to be just a “medium of exchange” and became a product.
The industry developed, grew, becoming an increasingly efficient apparatus for obtaining a cheap product to sell at a higher price.
