Notesale: Turn your study into money

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Money and Banking Notes
We want to talk about money
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I do know
how and I want to make sure you do okay
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If you had more money, you'd probably spend it
on more stuff
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And it doesn't really allow us to
understand things
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When the
money supply is greater than the money demand, economists have a term for this - it's
called an asset being out of balance
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For example, if you had a
thousand dollars of cash and also had thousand dollars worth of assets like new jeans (a
"pair of spinning right"), your portfolio would be balanced
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The
stimulus to the economy is not always immediate, but rather it tends to manifest in more
jobs and increased spending on big ticket items (e
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housing, transportation, etc)
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For example, people working at utilities will start receiving
paychecks, while those who provide goods and services to the car industry will experience
an increase in demand
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This persistence of high prices can lead to inflationary pressures, which can be
exacerbated by an increase in the money supply
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This can lead to an economic recession, as people start to lose money and spend less, which
in turn causes businesses to lose money, and so on
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Money is not a coin made of metal, it's not a piece of paper with the picture of a dead white
man on it, it's not anything in particular
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There are certain places where limestone rocks have served
as money
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When I was a kid, the only way to get access to those checking account balances you
could go to the bank and get some cash, but then when you go buy something you're really
paying cash
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There are other definitions of money, such as an m2 and an m3
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It's a near money that you can convert
them to money easily and quickly
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This is money in the United States today
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Would imagine what the change will be over time as you know
as time goes by
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It would be an innovation that's probably not very far down the road
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Income is a payment to owners of productive resources or
factors of production, which is different than this asset that we spend
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What are all the things you own?
Money is something that humans have used for centuries to help facilitate transactions
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As more people began to trade with one another, they began to use
different forms of currency
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These currencies, known as canal form, were based
on the flow of rivers
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There was a salt build up in the soil from that water that build up and those salts made it
really inhospitable to growing wheat but barley deal you know can survive or thrive and that
sort of salty soil made it inhospitably to grow wheat
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People living 4,000
years ago 4,500 years ago were by today's standards very poor and so if you came along and
said hey i want to buy something from you no i'll give you an ounce of silver that would be a
lot i mean that might be a month's wages or something of that nature
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Those things
emerged as the first forms of money
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Let's go on and talk about transactions costs
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As soon as we had four goods for goods, we
have one two three four five six prices six ways of valuing these goods, and what's
happening is the economy is getting more complex
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I enjoy your little graph, and then I'll
kind of talk about this in slightly different terms here in a second
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Draw you a graph, and
here are the number of prices by prices
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These items can be difficult to keep track of, especially if you're visiting a foreign country
and trying to figure out prices
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Summer found a single item and decided to express its value in terms of grains of silver
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Money is a medium of exchange and payment for goods and services
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We're always using these units of
measurement to simplify life and we face the same problem throughout our lives
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What we're doing is lowering transactions cost
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Money reduces the amount of
information that we need to process
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If we did not
have money, then there would be barter and everything would be expressed in terms of
everything else
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High transactions costs would result
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We have a choice if you want to put your resources into just
buying more clothes and saying okay, I've got a cause at this, you know I got six feet of
clothes here, and now if my income triples I'm gon' have 18 feet of clothes in the closet
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Our production of services as a percent of our economy is shrinking over time, but that's by
choice
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A prosperous economy is one
that raises the standard of living of the people who live there
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Inflation just refers to increases in prices, but
what economists do is use the term inflation is a tax on money balances
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Their balance would now be $9,500
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Money is not a very good store of value, gold tends to do well during inflationary periods,
real estate tends to appreciate in value during inflationary periods, something else is a
better asset to hold on to as a value rather than money, the soviet economy and was at 89 i
think they had basically it went from soviet union to russia but anyway and this was going
on for several years generally this these inflation problems are the worst in countries that
have a political problem
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Estimates were made of how many U
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dollars would go into Russia everyday, Russia's
labor force was bigger than the United States in the area that they had of land was huge
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There has never been an
official announcement about it but our biggest note our biggest denomination of currency is
a hundred dollar bill
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When you have inflation
when prices are rising like that then what happens is people just start fleeing that currency
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They put the
zeros on there too you know
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I think what happened was their printing
presses could not keep up they were printing more currency
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The idea of cornish spread from western Turkey into
Greece into Greece, they did n't have like you know a dotted line and guard posts saying
"Here's the border", just people doing business with each other and bunch of Iowans and
things like that
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Alexander the
great spread the idea of coinage throughout a large part of the world and there's never
been a time since then when there wasn't coinage, paper money

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