Precious Nothing

While walking by a Big Bank in new york the other day I could not help noticing a sign on the bank's window: "Come and open a savings account with us!"

I looked at the sign, and asked myself how it is possible that people save money. I realised that in fact i had never seen money. No one has. That is, we have seen some of its carriers - dollar bills, credit cards, travel checks, coins. These physical objects carry money, but are not money itself, if you really think about it.

For, when we send money overseas via moneygram or in any other similar manner, for example, the fact is that something else altogether must move. No bills, no credit cards, no physical objects as such. So money must be that thing that they all have in common, something we cannot see.

Bills that most people consider money, are actual carriers of an abtract, invisible concept the same way a newspaper is the carrier of news, but not the news itself. things that we see are merely metaphors for money, but not the thing itself.

Periodic Table

Later at home, I dug out my high school inorganic chemistry book and checked the Mendelev's periodic table to see if money was there. For if it were really to exist, it should have some physical shape, smell or form. It should also be in a gaseous, liquid or solid state. When i looked at the table, I realised that i had remembered correctly - money was not in the periodic table.

Precious Nothing

So how can we save something that does not have shape, smell, or does not even consist of atoms? Beats me.

I do not know any vessels that could capture something that is not in the periodic table. something that is not liquid, gaseous or solid. But the bank said they have something like that.

Diet Barter

I then asked two of my friends the question 'what is money?', and i got two kinds of answers. The first artist said money is 'diet barter'. an interesting view, but the other answer was even more thoughtful.

Velocity of Trust

It turns out that the true nature of money is that is not bulk concept, but instead it seems to exist only through its velocity. That is, money itself as a storable concept does not exist, but only the idea of exchanging its carrier exists. The person who came up with the word currency knew that. in fact, the very word currency comes from the latin root of the word curire which means to run.

That is, the person who named money or its other variant currency meant that the money only manifests itself only in its velocity, or movement. Other than that, I am afraid it does not exist.

This explains - among many other things - why countries like the united states or finland can run larger and larger current account deficits. indefinitely. That is, we can owe more money for ever as long as we can increase its velocity. More velocity, more money. Because money is velocity - velocity of trust.

Conversely, it also explains why countries with high savings rates cannot grow. Because you cannot capture velocity of something that does not exist, no matter how hard you try.