Money…!! Any topic related to money draws everyone’s attention, it is obvious. Better pace of money into the system, what is the pace of money?

Before getting into the topic let me tell a small difference between currency and money. It is just like print media and news paper. Newspaper is the concrete form which can be touched while print media can have different forms. Replace currency with news paper and print media with money.

Government can print the currency and push it into the system however, naturally, government loses it’s control over money when it is pushed into the system. Why? and How? Let us assume Money is the vehicle which is being driven by the government, after pushing it into the system it loses the pace to the system/people, means the control of accelerator goes to the system while the steering remains in government’s hands. What to do to keep all the controls with the driver?

Printing money with more frequency indicates the system is being driven in the wrong direction. Ideally, for instance, we need basic things food, shelter and clothes. Few people are producing products in the country which has the population of 100. When currency is being exchanged between people to buy basics needs. Here is the outcome of the scenario

1. Majority of the people are sitting idle with out producing other goods for the people.
2. Because of the exchange few producers get more and few producers remains with less currency, it is lack of concrete price index. Of course based on the efforts and investments the product should get appreciated.
3. Eventually, money is being blocked with only producers rest of the people are not in a position to buy basic needs either.
4. When sufficient products are in the system which are being produced by majority of the people, to address all the problems, money will get circulated in the right way.

So, the biggest action item on any government is mapping from needs to skilled people to produce.

Why is inflation

The root cause of inflation is demand supply, the demand could be artificial or natural. Lack of sufficient product quantity creates demand, demand creates extra demand. Eventually, the supplier/mediator takes the advantage to make more money. When the people should pay for a product more than it’s worth is called inflation.

The Actions item: Of course mapping between need and skill pool of human resources.

Why few sectors have high returns

Again, demand supply. Two categories of needs drive, they are 1. Basic needs 2. The need which will never lose it’s value. For instance, house is a basic need, extra land or another house comes under second category. Gold comes under cetegory-2, food comes under category-1.

Action Item: For basic need: Encourage and distribute. For The other need: Control its demand and pricing.

Why to print currency all the time

Ideally, currency doesn’t need to be printed unless it is spoiled or losing its value. or blocked at one place. I believe majority of the times second and third options are demanding to print currency often.

Why is it losing it’s value? Demand supply/purposive blockage of products –> inflation –> losing it value.

Why is the currency being blocked? Unaccounted money–> blocking tax money –> Purposive blocking.

Indeed, buying a product is not a blockage. For instance, buying gold is not a blockage. A person paid money to trade, the transaction is completed.

ROI (Return on investment)

Majority of the people are not realizing that the fact for blockage of currency is ROI (Return on investment). When the ROI is no better than the interest of Checking account, why does a person invest in other modes? Huge money is sitting idle here in the form of different accounts and bank lockers. Honestly, why do we need huge lockers to keep money 🙂 🙂 A question for all of us.

Action Item: To keep the system healthy all sectors need investments. So, it is government’s responsibility to have minimum ROI on the sectors to be boosted.

Losing focus on basic needs

Demand creates attention or attention creates demand, it is possible vice versa. Unfortunately, we are losing the focus on basic needs –> Leads to losing attention on basic needs –> Leads to creates hyper demand –> Inflation –> Printing more currency –> System collapse —> Tailoring/ Altering the system with patch works.

The better pace of money into the system

Another good read (Highly recommended)

Basics of Economy one should know