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SilverHubs posted a blog entry in Currencies, precious metals & silver's monetary usesOne of the first things that we all add up as we're about to go travelling is - what’s it going to cost £$€ - and how will I pay for it? As an international traveller, by default you need to be an international currency trader! What is money? worth exploring further > Money, or ‘currency’ is basically cheap! It's cheap to produce! Most of the currency we use today is created by either digital key-stroke on a computer, it’s literally typed into existence! or, it’s printed by a few select private organisations around the world who are allowed to print currency using relatively cheap paper stock. On the other hand, we all know that physically creating wealth is often far from easy. Link those two aspects together and what it shows is that real creation of money and wealth is really the creation of something of real value, i.e. not necessarily currency ‘often referred to as money’, What’s more important as a traveller, is having an ‘exchange value’ or a barter. Throughout history, gold and silver were the real physical elements used for real monetary exchange. I can tell you from experience travelling around the World, people do prefer something real and physical and more valuable than paper currency, or ‘fiat money’ Things that you use, hard assets, real valuable items that other people will gain real value from. Costs of creating money Source 1 private banks get to create it, on behalf of governments. These private banks get to add the first profit margin onto the new pretend money they create, (print or digitise into existence) Generally modern money, digital or printed is created by issuing debt. You or I go get a loan from a private bank, they create the currency and thus create the first tier of ‘money cost’ or ‘interest’ All aspects of money creation bear a cost of creation, as well as a profit margin for handling. As consumers and travellers, we’re quite a way down the pecking order in terms of what we pay for obtaining our money! Big banks get the cheapest money, often for free! or even as at 2019 certain Countries are able to create money at zero or minus cost, as in one organisation will lend a foreign bank money, in Europe or Japan and in return they’ll actually receive less money back, when they come to cash their bond than they paid for the bond, (a lending instrument) That’s basically referred to as zero, or negative interest! These banks then get to gamble with the new money. Some of the newly printed currency gets lent to other smaller banks, at a slight profit and some gets lent to businesses and private individuals at a higher profit! Travellers money, often gets re-packaged into ‘money products’ like convenient plastic cards, foreign currency notes, travel cheques, which all tend to incur a cost of creation, a cost of re-sale plus a cost of exchange, or cashing out. As a World traveller, you’ll notice this when you come to buy your currency as well as when you come to re-cash it, or exchange it for some other form of currency, goods or services. You might not always notice it, but often those extra costs will be buried into an ‘exchange rate’. You might see signs like ‘zero commission’ but that doesn’t mean the money changer isn’t making his commission from the exchange rate! Imagine if there were ways to eliminate or vastly reduce the ways of obtaining and exchanging our travel money. Fortunately today, there’s lots of alternative ways of carrying foreign currency, or indeed our own internal national currency. All currencies incur different levels of costs and risks, some of which I will summarise below. Exchanging something real, of real value can be a great way to carry and transfer our wealth from place to place. If we think of wealth as the ability to create something of true value and purpose to another person. This might be things like, helping with jobs in return for somewhere to stay. Basically trading our own time and labour, for that of other peoples. This arks back to early days, when much of the exchange of trade and value was conducted at ground level, face to face, by barter. It’s the core of value and still something that can be used throughout the World today, which doesn’t incur any third party costs of profit margins from banks, money creators and currency lenders! There’s possibly a reason that Jesus chastised the money lenders in biblical times! Extra currency trivia Natural state of the World - is to save, be frugal, be cautious. It’s deflationary, so why are central banks hell bent on creating inflation AND telling us it's a problem if we don't have sufficient inflation! 2% inflation seems to be the central bank cartels holy grail. Technology generates efficiency which in turn saves money. High levels of debt - stutter growth and money circulation, as is the case today US$ money supply went up from $800 billion, to $4.2 trillion in 10 years, whilst the turn-over, or way that money circulates dropped so who got all of this freshly fiat created money? to be continued . . . . 2020 Meanwhile, owning your own precious metals, physical gold and silver means you're placing at least part of your own wealth and created value outside of the banking system, you are in effect your own central bank! and liable to no-one but yourself.