Everyone is concerned about money. The rich are concerned about getting more money, and the poor are concerned about not having enough money. There are two things that everyone is concerned about: the weather and money. If money is so important to us we should know what it is and what it is not.
Money is not like a bag of grapes. Once you eat the grapes, they are gone, you will need to find a new source of grapes, so you can fill your bag again. This is not how money works. Once you spend your dollar bill, it does not get digested and turned into shit. It is merely received by one person who briefly holds on to it, then they give it to someone else.
When people talk about money for a project, they always ask “Where is the money going to come from?” as if there is a box that contains all of the money in the world and that money would need to be distributed to the people or projects that need it. When the next project comes up then money would be pulled out of the same box and distributed to those involved in the project. If this was the case eventually the box would become empty. This is not how money works.
Money doesn’t come from anywhere. There is not a box (Fort Knox) or source that contains it. There may be ledgers that accountants write numbers on. The same way that you would keep score in a golf game or when you are playing cards, accountants keep score of money. What they are keeping track of are points or kudos that are assigned to a certain person.
There is a concept used in economic circles called the Velocity of Money. The Velocity of Money is used to determine the health of an economy. A specific measurement of the Velocity of Money is the GDP which is the Gross Domestic Product. When the economy has an increasing GDP you have a healthy economy. When there is a decreasing GDP, the economy is sluggish.
This is like a human body that is full of blood, but the blood is not circulating. If the blood is not circulating, the person is dead. If the blood is moving too fast, with a heart rate of 200 bpm or faster, the nutrition and oxygen doesn’t have time to react with the cells, and this will also cause death. As in the economy, money needs to have a velocity in a certain range to keep the economy healthy.
The most simple description of this would be when there are ten people sitting in a room with one dollar bill. They pass the dollar bill one to another, once every hour. Goods and services like an apple, a sandwich, or a hug and a kiss go in the opposite direction of the dollar bill. When you go home, and give your check to your significant other you should get a hug and kiss, these are goods and services. How much will each person in the group be earning if the dollar bill goes around in the circle once per hour?
They will be making one dollar per hour even though there is only one dollar bill and ten people.
If the dollar bill goes around ten times an hour, each person will be making ten dollars an hour. If the dollar bill goes around 100 times an hour. Each person will be making 100 dollars an hour, even though there is only one dollar bill. Some people will be saying “They don’t get to keep the money”, and they are 100% correct. Every week you receive your paycheck, and what do you do with that paycheck? You pay bills and give it to other people. The next week you get another check and you pay bills and give that one away too. The faster money flows through the economy the better-off everyone is.
What happens to the game if one person in the circle gets nervous and puts the dollar bill in his pocket? The game is over. This is what happens during a recession. People stop spending their money and the economy/GDP/velocity of money collapses. The last time that this happened in the United States in 2007 George Bush took a piece of paper and wrote 800 billion dollars on it, and he walked the piece of paper across the street to banks, and handed it to them. This caused the general population to be more confident in the economy, so that they would be more willing to spend more money. Four years later, the bankers wrote a number on a piece of paper, walked it across the street to Barack Obama, and said “Thank you!” In an interview, George Bush was asked where he got the 800 billion number from and he said “I just made the number up, it seemed like a really large number.”
To keep the money circulating we have a person in the room and when he observes a person holding the money in their pocket, and not passing it on, he takes it from him and puts it back into circulation. This person is called the tax man. All of your taxes are given to people that are building schools, hospitals, and weapons. The government doesn’t keep your money, they give it to someone else.
The question is “How do we increase the Velocity of Money in our lives and the economy?” You could walk into the room and frighten everyone and say “There is a terrorist outside, and if you don’t pass the money faster, you will be killed.” You could also tell everyone that there is a wolf at the door, and if they do not pass the money around fast enough, the door will automatically open up and let the wolf in. This is what happens during war time. More money gets circulated and more work gets done out of fear.
You could also give everyone ten one dollar bills which would make the fear go away, and they would be more willing to pass the dollar bills around. This is accomplished by raising the minimum wage. If you pay people a higher wage, they will purchase more goods. This will help the businesses to hire more people, this gives people more money to buy more goods. The more goods people buy, the more items need to be recycled and processed, the more storage we need, and the more garbage that is taken out and needs to be processed. All of this increases the GDP. The higher the GDP and the higher the percent of increase in the GDP, the more confident people are to be spending the money in the economy.
Money is merely a figment of our imagination. Money is only energy moving from one person to another. The reason that we need money is because of The Human Condition where we are trying to keep track of our value compared to someone else. Goods and services could be passed around from one person to another without having a monetary value attached to it. The only way that this can happen is if everyone in the world were to advance to Kaivala and achieve enlightenment and that they would no longer need a scorecard to rate their value.
We will be discussing this in finer detail in later lessons. Money is complicated. Far more complicated than sending a rocket to the moon. Knowing how money works requires understanding people, and how people function in The Human Condition.
Observe your life in detail and examine how important money is to you. Journal your feelings and the importance that you put on material possessions in your life. Begin to figure out what possessions that you really need for your life, and which ones that you use to establish your status in the world. Decide if any judgements need to be made on what attachments that you should keep or get rid of as far as money is concerned. You can use stickies to sort out your thoughts and feelings on what money is, and what it is not. With all of these things considered should you be hoarding your money, or should you be giving it away. This is a decision that you need to make for yourself.
