Quote:
Circulation
"Think of money as you would blood. Now, I'm not saying that all human beings are economic vampires, but rather we need blood to both survive, as much as society needs money to function. For example, a person can have plenty of blood, but if that blood isn't used (i.e. being pumped into your various organs) then that volume of blood becomes useless, and ultimately you'll die. Money is the same thing as blood in that if it isn't used - it isn't circulated. And if it isn't circulated, economies start suffering from organ failure. So in essence circulation is mostly about how frequently money is moved-around and used, hence the term."
"Think of money as you would blood. Now, I'm not saying that all human beings are economic vampires, but rather we need blood to both survive, as much as society needs money to function. For example, a person can have plenty of blood, but if that blood isn't used (i.e. being pumped into your various organs) then that volume of blood becomes useless, and ultimately you'll die. Money is the same thing as blood in that if it isn't used - it isn't circulated. And if it isn't circulated, economies start suffering from organ failure. So in essence circulation is mostly about how frequently money is moved-around and used, hence the term."
Quote:
Assets vs Capital
"Do you know why footballers earn so much whilst an Olympic athlete earns less? It's quite simple, they differ in value. Let's take paintings and cash for example. It's 1985 and Linda and Josh have $1 million each. Linda decides to spend her $1 million on a valuable painting while Josh simply buries it under a tree. 20 years pass and it's 2015. The painting Linda has bought is now worth $2 million because that money has become less valuable compared to 1985. However the $1 million Josh kept buried under his tree is still - $1 million dollars, and so unlike Linda, he can't gain any profit as a result."
"Do you know why footballers earn so much whilst an Olympic athlete earns less? It's quite simple, they differ in value. Let's take paintings and cash for example. It's 1985 and Linda and Josh have $1 million each. Linda decides to spend her $1 million on a valuable painting while Josh simply buries it under a tree. 20 years pass and it's 2015. The painting Linda has bought is now worth $2 million because that money has become less valuable compared to 1985. However the $1 million Josh kept buried under his tree is still - $1 million dollars, and so unlike Linda, he can't gain any profit as a result."
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