Essay Synopsis
~7 min original read (1219 words)
Introduction to the Theory of Money Part 1
By Tae-Sik • Published July 27, 2020
Core Thesis & Overview
This introduction to monetary theory explains how currency dilution from money printing causes inflation, while productivity, technology, and trade drive deflation. It outlines the roles of the U.S. Treasury and the Federal Reserve in debt monetization, and notes how globalization and the internet have temporarily masked inflationary pressures.
Key Takeaways & Analysis
Money and currency is our medium for the exchange of goods and services. In the US, we use dollars. It is printed and regulated by the US Government. It is divisible, scarce, durable, portable, difficult to counterfeit, universally accepted, and stable. The value of a nation’s currency is correlated to its scarcity and wide acceptability. […]