At some point in your life you will hear someone say “just print more money.”
In addition you might see people get excited when The Federal Reserve lowers interest rates.
People who say or do either of these things probably don’t know much about the monetary system.
Stimulus, bailouts, inflation, deflation, deficits, debt, interest rates, quantitative easing! What does it all mean?
Right now in the first quarter of 2020, The Federal Reserve has lowered interest rates to zero and is set to add more capital to the money supply. Is this a good thing?
There is much to know about money and the monetary system and you are probably not going to learn it from any political leaders. We know we don’t learn it in school. Why? Why don’t our schools teach us about money, personal finance, and the monetary system? Once you enter adulthood you are left to wander into the world without any real grasp on money. Is this intentional? Some people believe it is intentional.
Once you leave high school, even once you leave college if you attend, you haven’t been given knowledge about how to create a household budget, what fractional reserve banking is, what debt is, how inflation works, usury and interest rates, or any of the myriad and convoluted aspects of our monetary system. You are thrown into the wilderness that is the economy and left to fend for yourself.
The good thing is that you can teach yourself about money and the economy, and it is not all that difficult to do. Here are three things to do to begin learning about money and the monetary system:
- Find a reputable website, magazine, blog, or podcast that focuses on money and personal finance.
- Find some books on the subject and start reading.
- Spend less than you make, save the difference, and watch it grow.
Number three is in bold because it is so crucial. Read number three again.
No recommendations were given because there are so many to choose from and navigating through the available information on the subject of money will be a rewarding process.
Hopefully you have enough now to start teaching yourself about money and monetary policy.
Until next time, good reading.