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Sunday, 24 August 2014

The value of money

Money is only a monetary item within an economy or monetary union.

The real value of money is determined by all underlying value systems in an economy or monetary union. 

For example, sound monetary policies, sound governance, sound education, sound health policies, sound industrial policies, sound defence policies, sound judiciary, sound legal system, sound commercial policies, sound international relations, sound sustainable development, sound political system, etc, etc, etc. 

The real value of money within an economy is indicated by the nominal interest rate less the inflation/hyperinflation or deflation rate.