Money does grow on trees

Photo: adintermediary.com

Photo: adintermediary.com

When you stop and think about it money does grow on trees, at least the bills do. All paper currency is made from paper that comes from trees. Therefore, when we are told that money does not grow on trees, we can truthfully reply that it in fact does grow on trees.

Does this mean that we just get some paper and print our own currency? Of course not, you’d go to jail for counterfeiting. Money’s value comes from the trust and confidence people place upon it.

Every nation’s currency is dependent upon the trust and confidence that its citizens and those of other nations have placed upon it. In the past 100 years there have been 55 countries who have had their currency devalued. This in turn caused hyperinflation for the nations. Hyperinflation means that the citizens of that nation had pay thousands of countries’ currency for even basic necessities.

Back in the day, people would barter with each other for goods and services that they needed. A baker might trade a loaf of bread for a gallon of milk. The barber might trade a haircut for some hay. The problem with the barter system arose when someone did not have an immediate need for another’s product. People invented money as a way to facilitate their acquisition of items they needed.

For example, if the baker had no immediate need for milk, he could take the paper given to him by the milkman. Then, in turn he could use that paper for buying a haircut from the barber. The barber would then be able to redeem the paper for the gallon of milk from the milkman. So while money does grow on trees, we still have to have trust and confidence that it will be accepted by others. If barber did not trust that the milkman would give him the gallon of milk for the piece of paper, he would not accept it from the baker in exchange from the haircut.

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