What is financial intelligence
Financial intelligence is the gathering of knowledge to comprehend insight on everything that pertains to monetary matters like:
- How to harness currency to grow the economy
- What is money
- How is currency created
- How currency fluctuates in value
- What is the way to wealth
- How currencies relate to other currencies
- How to protect assets in this type of economy
How to harness currency to grow the economy?
There are four factors for growing the economy monetarily such as growing jobs, energy, food or housing. The government incentives for these four areas are tax free to keep the economy working to offer goods and services. Goods and services creation is what creates the value in the system to create currency in existence to purchase these goods and services. This is the ecology of the system. Let’s examine the concepts.
What is money?
Money is gold and silver. The concept of paper certificates in exchange for real money is how the concept of paper notes start. Real money was not used to for exchange of goods. The paper certificates was used. This led to concept of producing more paper than gold in vault moving away from store of value until there was no peg of store of value. Fiat currency is the removal of a store of value of gold to fix its purchasing power.
The United States currency was removed from the gold standard after Nixon made it the petro currency in 1971. This meant that the US certificate is a debt note. Every nation must convert their currency to ours for oil.
How is currency created?
Currency is printed into existence when someone takes out a loan. This is why it is called a debt note. A human resource or an incorporated entity signs a guarantee against their credit worthy name or collateral of an asset for financial institution to approve loan to send to federal reserve to create currency for that loan. The person receives money purchases something from another person. The currency goes in their account and the financial institution loans out that currency 12 times for interest. This is how the currency system works.
How currency fluctuates value in purchasing power?
There is the nominal or numeral value of a one dollar note and the amount of purchasing power of that currency note. Since the us currency has nothing to store its value, it fluctuates in purchasing power. The more currency that is created chasing the same amount of goods and services through velocity of exchange for those same things the more currency is needed for purchase those same items. The less currency that is in circulation with less velocity of exchange results in more purchasing power of currency. The problem with this system is that when money is created there is interest created with that currency. This means that after currency gets paid there is interest outstanding over that currency in circulation. The interest can never get wiped out to zero. Inflation is what keeps the ponzi scheme through lowering purchasing power of currency over time makes paying interest easier through higher prices and higher wages.
The prices of houses are not going up in value. The currency is losing purchasing power through inflating away purchasing power to use more currency to purchase the same house years later. Inflation is an invisible tax that steals from people in multiple ways. When prices rise, wages rise, taxes rise for higher income and savers lose purchasing power. Consumers pay more for items, pay more tax and watch their savings lose purchasing power and cost of interest is more from inflation of prices. This is why it is impossible for people to move from poor to middle or to wealth.
What is the way to wealth?
Work with the current not against it. What? A job is one income that is limited to time and wage. This is working against the current with limitation to surpass inflation. Working with the current is to leverage cheap debt to aquire asset that will create cash flow. Creation of multiple cash flow assets is the way to wealth. The four things I mention earlier that economy uses to function is jobs, food, energy or housing.
How currencies relate to other currencies?
The us currency against other currencies is something to understand as a foreign investor. Most of the globe lives on two US dollars every day. This is third world or emerging countries.
The US currency to China is 8 to 1, Vietnam 63 to 1 or etc. The point is that investing in other markets come with market risk as well as currency risk.
How to protect assets in this type of economy?
Assets that are real like silver, gold, copper stock, uranium stock, cryptocurrency or real estate. This is a start to understand financial intelligence. This is only for informational purposes not advice.