Money is really just a representation for resources, so if it was simple, the value of money should adjust to be equal in total to the total amount of resources on the market. However, then people go and make it complicated by buying stuff like services, money itself, lending money, and so on.
Value for things like services are also subjective, varying by the person and how desperate they are, or how loathe to sell their time and energy.
If I have zero water and $50, but you have 50 waters and $0, I would value one of your waters more than one of my dollars and you would value one of my dollars more than one of your waters. And so we would trade, and both be happier for it.
Unless you’re in a desert with no stores around, in which case the person with 50 waters is going to tell you to go take a hike because that dollar is useless to them but the water will keep them alive.
And, of course, there’s inflation. The value of something is a perceived thing, but the actual dollar value attached to that perceived value always tends to increase, except when an economy collapses. Inflation is caused by a government pretending things have more value than they actually do and pocketing the difference.
Money is really just a representation for resources, so if it was simple, the value of money should adjust to be equal in total to the total amount of resources on the market. However, then people go and make it complicated by buying stuff like services, money itself, lending money, and so on.
Value for things like services are also subjective, varying by the person and how desperate they are, or how loathe to sell their time and energy.
Value for resources is also highly subjective.
If I have zero water and $50, but you have 50 waters and $0, I would value one of your waters more than one of my dollars and you would value one of my dollars more than one of your waters. And so we would trade, and both be happier for it.
Unless you’re in a desert with no stores around, in which case the person with 50 waters is going to tell you to go take a hike because that dollar is useless to them but the water will keep them alive.
And, of course, there’s inflation. The value of something is a perceived thing, but the actual dollar value attached to that perceived value always tends to increase, except when an economy collapses. Inflation is caused by a government pretending things have more value than they actually do and pocketing the difference.