How many of us actually see our bosses or our company taking our salary, in note form, to the bank to deposit into our account? Or is it just a change of the figures in the bank book. If it's just a change of the numbers, then where is the actual physical money?
Actually, money is only an I.O.U from the government. It is a "contract" that says that that government owes you money. In other words, If u have a $10 note, it just means that the government owes u $10 worth of gold, as most countries' currency is pegged to gold (except for the US and some other countries). That's y in the notes, it has the words "Legal Tender" printed on it. So money, as in notes, is actually just a piece of paper of I.O.U from the government. The real money is the gold that is behind every piece of notes.
So end of the day, the I.O.U that we carry in our wallets everyday, doesn't worth as much as the government is willing to recognise it.
posted by Whiteaura II @ 3:01 PM
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