What is our money worth?

What is our money worth?

What do you measure about the value of money? Clear, 50 Euro 50 Euro but are actually, but only if someone is willing to give me for a piece of paper Were to be delivered. The piece of paper is, therefore, nothing more than a promise of fidelity to our financial system and its Background.

 

If so, I want to know, what is the cost of money, so you can look for example on interest rates. Interest, what is the cost of money. Because it is the lending costs and of the risk appetite in. The interest rates are high, money costs a lot, these are low, as is currently the case in the Euro area and the USA, so money is cheap. This can be seen very well, on the yields of government securities. These are an indicator for the interest rate situation in a specific country (see figure 1 Negative Bond yields source: Thomson Reuters).

Substituting this relation in a different context, one obtains a new image. If a Good (in our case, money) nothing, it is generally considered to be not recoverable (Which costs nothing is worth nothing!). If money has no price, and it costs nothing, has no value.

This is the Problem with which the economies in the coming years and probably decades to circumvent. Money must also be a cost factor. Because otherwise it has no value. In this context, the prices rise and Inflation. The yields of government papers indicate a clear Trend (cf. chart 2 Euro Zone Bond yields source: Thomson Reuters).

But how can I make my money valuable? Gold is here a possibility? How could our future financial and monetary system look like?

You can read more about this in: The greed for Gold

 

Article image © Gerd Altmann / pixelio.de

Graphics Source: Thomson Reuters