On what basis is money printed?

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A film song says, “money is God, and even that God knows it.” If you do not have a change in your pocket when you leave home, you should return immediately. But there is also a problem.

What would a world without money be like

If you forget to pay the rent before leaving the house and leave in a hurry, the landlord will lock and seal the house when you return. We don’t know when this accident occurred in the forward journey of Stone Age man, but modern man doesn’t even have the right to commit suicide if he doesn’t have money. Because there arises the question of who will pay for the burial or cremation of the dead body.

he government prints currency notes to facilitate the transactions

Ok, let’s get to the point. The government prints currency notes to facilitate the transactions of the country and its people. Gold, silver, copper, salt, peppercorn, and precious stones were bartered in a time before paper money was printed. Liquor and cigarettes were also used as money. Printed papers removed the need for barter for these. Cash notes have made it easier to carry, hold and protect the proceeds,

If only money did not exist we would still be in a barter economy. Our civilization, economy and science have not progressed. Is it a feasible job to pay someone who buys metal with salt and knocks it into a rocket and pays in cigarettes and alcohol to go on a space trip?

If you stop at the airline office with a bag of salt, will they let you fly abroad? If your auto mechanic only wants eggs but you only have vegetables, do you have to walk miles to find an auto mechanic who needs vegetables?

If we only have that note called money, we can go in a horse carriage. You can also go by plane. Go to school, go to university. Can be cooked at home. You can eat at a five star restaurant now we understand one thing. Such a resource or instrument that regulates the life and death of man cannot be in the hands of a bank or a commercial establishment. It should be in the hands of the government.

The next question

is how the government deals with this powerful tool. To handle this complex and delicate business, the government has created a body called the Central Bank or the Reserve Bank. Because the law says that the government that gives way to people’s daily profanity should not handle this too. But we will see later whether everyone listens to it or not.

Fiscal policy is the government activity that leads to people’s daily abuses. That is the whole business of government! The work of handling money required for these is called MONETARY POLICY. It will be carried out by the Reserve Bank. When these two go hand in hand, the historical work and social life of the country will flourish without any disturbance.

Any Western country can be cited as an example, but Switzerland is a very beautiful example. An example of the abuse of these principles can be mentioned a country like India and Zimbabwe as an example of a country that died due to abuse. We will explore these later.

What we need to know for now is that money is a tool that we can add value to. If we add value to it in small pieces, we can exchange it according to our needs and get what we need, and we can convert what we buy and sell what we don’t need into exchangeable value. It is important to add small pieces because every time we need rice we cannot give away the house and buy rice and add the rest as salt.

Thieves can snatch this currency

note while in hand. Even if it is locked in a safe deposit box in the bank for fear of it, its proceeds may be looted by irresponsible government actions. A story is told that Matti, a disciple of Aviveka Purana Guru, tied salt in a sack and crossed the river.

These states and rivers are the same. No matter how much you give, you don’t get it. Governments have mastered the art of stealing bank notes in a bank vault to keep them intact.

How much money should be in circulation is an objective value. A promissory note is a promissory note issued by the government. There is no such thing as a promise to the government. The procedure we understand is that the government immediately hands over the value of the note to the holder.

MONETARY POLICY but does not support the FISCAL POLICY of the government

In the early days it was understood that the central bank, the agent of the government, would hand over the note in gold of equal value if the holder asked for a refund. So in the early part of this century the Reserve Bank bought and held the gold equivalent of the notes while printing them. But this policy is a reliable MONETARY POLICY but does not support the FISCAL POLICY of the government and therefore is not supported. Due to this, the economic development of the countries has stagnated.

Now all countries have abandoned the principle that any country

should print money and hold gold equally. Only Switzerland up until the 1960s arbitrarily adopted a policy of holding 40% of the money it printed in gold in its central bank. Many of the world’s rich people have put their money in Swiss banks, rather than the country’s generous monetary policy, this policy of protecting the value of money is probably one of the main reasons.

Even now there is always some connection between printing and money and the historical functioning of the country. Only corrupt and overspending governments can turn a blind eye and irresponsibly print notes and dwarf the country.

So normally a sales committee headed by the RBI governor decides

how much currency notes to print. It will also take into account the expanding economic needs and old obsolete notes that need to be replaced.

But even then, that’s an objective assessment! In the meantime, if government pokes his nose into it and tries to give me some credit, the central bank may succumb to it. Then inflation will explode in the country.

Banknotes are called FIAT MONEY because they have a nominal value on the government’s promise to them. The Italian word FIAT means LET IT BECOME. China was the first country to issue FIAT MONEY.

https://https://upload.wikimedia.org/wikipedia/commons/d/de/Yuan_dynasty_banknote_with_its_printing_plate_1287.jpg

thanks wikipedia

 

The Chinese currency is also named Yuan because it started in the 13th century during the reign of their emperor Yuan. In the picture below you see the plates they used to print money in the 13th century. Here, as in any other civilization, the Chinese were the only pioneers.

All your doubts about the historical use of money will be cleared.

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