What is money and why does it lose its value every year?

Money, in its essence, is a medium of exchange. It allows us to trade goods and services effortlessly, eliminating the need for barter systems. Since its inception, money has evolved from tangible forms like shells and precious metals to digital currencies in today's technologically advanced world.

*What is money and why does it lose its value every year?
-Money is medium of exchange faith by the believe of people as they get goods and services by the exchange of money.
1)The money looses it value because of the devaluation happens when a government makes monetary police to reduce a currency's value.Devaluation is made through the decision that make a currency base.

1. Depreciation of money happens because of supply and value, demand in free foreign exchange market.
   3)For example if there is more money in the country that you actually need,there will be excess demand(everyone can buy everything) and now prices will immediately rise(since things are few and more people want it).Hence,money loses it value,whatever you could buy with that money is expensive now.
   4)There could be many reasons why Central Bank (who prints money)can increase the supply of money.Like government wants more money to spend so it tells Central Bank to print for it and many more.

*Why does the value of money decrease over time?
1)The money is basically a medium of exchange,which is printed by the choice of Central Bank of Country.
2)Central Bank make monetary policy for the quantity of printing "Money"(In comparison of real output of economy), generally,Central Bank deliberately choose low positive inflation(1-2% annually)as a target,so they keep a phase for money to lose value over time.
3)When Government decide to print more money,the supply of money became faster than the supply of goods(or worth/value of goods),that decrease the value of moneyose over time.

*Why does the value of money decrease when more is printed?
1)The value of money decrease when more is printed because there is too much money in circulation relative to the available goods and services,the value of money can decrease.
2)The value of money is decided by seller and buyer,if buyer have more money,money will automatically loose it value.

*Why does the value of money decrease with Inflation?
1)Money is form of exchange,its greatly impacted by consumer and seller,when Inflation happen the cost of production increases, business may pass on those costs to consumer in the form of higher prices.

1. Technically, Inflation happen when Central Bank raises the(amount of money in circulation) monetary supply more than economy grows.
   Inflation-Growth is monetary supply growth in nominal GDP example growth in nominal GDP-5% growth in monetary base 7%.
   Inflation=7%-5%=2%

*Where did money's value come from?
1)At base,money doesn't "have a value"it just "information".we can only say that the purpose of "money" is to "record the measure of value" provided by a seller to a buyer.

1. The value of money come when everyone in the society must agree the "standard unit of measure" and the "form of tokens"( notes,coins,split sticks or shells, or whatever token is accepted as money by the group at the time). In modern societies this the facilitated by having the government disagree the form and units (example dollar, notes and coins etc)
   3)The value agreed between a buyer and a seller can be taken as "fair" where there are many buyers and sellers of similar goods and services who all have equal knowledge of the market quality,Cost and prices and where all parties have equal bargaining power and their is no collision.
2. The value of money is decided by the amount based on the circumstances of time including taste of product,degree of Hunger, how much is earning in future to buy.
3. The value of money is dependent on policies, economics and related to development.
4. Initially,money is used to be gold, silver or bronze coins have the worth of value of metal as it was made by, because of the scarcity of precious metal money is made by paper,copper,aluminium,Tin and other cheaper materials it value is decided from the wealth of country that issue it.

• Why does money lose it value?
  -Money loses in value due to several factors:

1. Inflation: When cost of production increases the company put higher cost on the price of product which decreases the value.
2. When there is more of something then required,it loses is value
   supply>demand that is why price Falls when something enters in bulk in market.
3. if everyone has more money in hand than actually need demand will increase (everyone can buy everything)a new prices obviously rise (since things are less and people are more to buy).
4. When money loses value whatever you buy with $1 will become expensive.

• Will money ever lose it's value?

1. It is impossible for money to have a stable value it changes its value overtime due to several factors:Inflation,more printing of money,unemployment increase demand and exchange rates.
2. Money's value lose at the time of War, ambiguous agenda, domestic disturbance and trade deficit.
   3)Money's value also reduced with increase in mindless spending by the government losses and trade exchanges.
3. Moreover,goods and services fluctuate the measure of currency.

• Why does the value of money decrease when more is printed?

1. When Central Bank of country (printer of money) Prints more money the demand and supply cycle get disturbed,everyone has more money to buy Limited items when demand increase the value of money decreases.
2. Central Bank of country increase the supply of money so that people spend more,which increases the inflation of the country.

• Why do we have this type of "money" and its value will Erode with time?Why should this ever happen?

1. It's impossible for money that maintains it value for everything anyone buys or for any basket you specify.
2. The value of money errors using any reasonable measures of value, it's likely the reason is fiscal or monetary policy.Fiscal policy tends to Erode the value of money because it's always easier to postponed questions of who will pay for things.

• Is cash losing its value?

1. Yes, Cash is Losing its values slowly due to many factors like inflation,exchange rates and more printed note in circulation.

• How does money work?

1. Money is medium of exchange. Initially,money is used in place of barter,used to be physical object that were deemed to have tangible value and thus were traded for other items of same value.
2. Today money is a piece of paper simply Idea backed by the faith and trust of government,the more trust what is the country the more valuable the money and vice versa.
3. Properties of money are:
   a) Unit of account.
   b) Store of value.
   c) Medium of transaction.
   d) Standard of deferred payment.
   so, money work as a form of transaction and from the economy to be generated.
4. Money works by acting as a store of value,a unit of account, and a medium of exchange.As a store of value,people can save money and use it to purchase goods and services later on.

• Why does the value of money or currency depreciates overtime?

1. Money's value depreciate overtime due to inflation and several other factors, the slow decrease in value is by design, the mandate goals by the Federal Reserve Bank of the United States and European Central Bank are to manage the price of money so that the average annual inflation is 2%.
2. Whenever a little bit of inflation tend to show the economy and eventually lower inflation, a small amount of deflation tend to crash the economy and spiral it into further deflation. On in short deflation is painful.For more painful then and equal but opposite amount of inflation.
3. When government or Bank create more dollar, then is less is existing money will lose the small amount of it spending power, that is inflation.

• Why money have it value?

1. Money is medium of exchange,it has value because of people faith and other parties will accept it.
2. Money have value because people agree to give it value.
3. Money have value because people have believe that day will able to exchange this money for good and service in future.

• How is the value of money decided?
  1)DEMAND AND SUPPLY: if demand of item increases the value of money decrease, suppose the demand of dollar increases in India the value of rupees decreases.

1. MARKET PSYCHOLOGY:If the investor feels that the market there investment is not trending they will search new market and move the investment suppose if Indian investor see U.S market more stable they will invest their money their result will be dollar will be more powerful than Indian rupees.
   3)FISCAL POLICY: Fiscal policy made by government decide the value of money in the country.
2. INTEREST RATES AND AVERAGE RATE OF RETURN: If government give good rates of interest and average rate of return to the investor the value of money get affected in a good way.
   5)IMPORTS AND EXPORTS: if imports is more power than exports the value of money decrease and vice versa because the country loses its money value.

*How can we handle the depreciating value of money?

• The value of money will be depreciable overtime and we should know how to handle that appreciating value of money:

1. Invest in higher rate where you can get some amount of money.
   2)Buy gold as it is real money to overcome depreciable money.
2. Accept the fact that the value of money will be change over time.

• What makes the value of currency appreciate and depreciate?

1. Money hold value as medium of exchange the value depends on the health of the economy.
   2)If the economy is weaken, the value of currency depreciates.
   3)If the economy has growth, the value of currency appreciates
   4)If there is demand of domestic currency in international market the currency value appreciates
   5)If there is rise in inflation, low interest rates and poor fiscal policy the currency value depreciates.

• Why is the value of money always decreasing?Why can't it be a constant one?

1. the value of money always decrease due to inflation.
2. the value of money always decrease due to high supply and low demand scenario.
3. The value of money always decrease due to more printing notes in the market.
4. The value of money can't be constant one because by designed the money value changes as it affected by several reason mention above..

• Will the collapse of the US dollar affect India?If so to what extent?
  1)Yes, the collapse of the US dollar affect India, but not so badly as it will effect other countries:In today's world of trade and economic dependence,all countries are connected,more than just good and services exchanging currencies, the fall could be severe and fallout would be larger than anything:
  If the US dollar collapse affect India in negative way:

1. Dollar is global currency and it is world's dominant reserve currency pretty much if dollar collapse emerging economy in the world will be affected to some extent.
2. Top commodities of world are handle in dollar-Gold,Oil and petroleum so large amount of commodities get scarce.
3. Jewellery,Pharmaceutical,Textile and Leather industry may have slowdown.
4. Unemployment Mein increase in India.

• When your circumstances,would you rather have more time or more money?

• Over course, I will choose time over money I will give up my all money if I was allowed to go back 10 years before.