Saifedean Ammous on:
• What is money?
• Money is something people use to trade for other things (a medium of exchange.)
• It isn’t something you get just to use or consume; you get it so you can trade it later.
• Money solves the problem of the “coincidence of wants,” which means you don’t need to find someone who has exactly what you want and wants exactly what you have.
• The idea of a “medium of exchange” is very clear.
• The idea of “money” is less clear and people argue about it.
• What makes something good at being used as money?
• The most important idea is salability.
• Salability means how easy it is to sell something quickly without losing much value.
• There are different types of salability:
> Across time (will it keep its value in the future?)
> Across space (can you trade it in different places?)
> Across scale (can you trade it in big or small amounts?)
• Salability across time is the hardest, because industrialisation / technology has made trading across places and amounts easier.
• Gold has historically been very good at keeping its value over time.
• This is because of its physical properties / characteristics.
• These properties give gold another important feature:
• A high stock to flow ratio, which means:
> Gold is scarce.
> It’s hard to produce more of it.
• Because of this, people tend to hold onto gold, and its value stays more stable across time.
• Other things used as money often lose value over time.
• So when something has a low supply growth rate, people trust it more, and it becomes more salable.
• This is why, for most of history, gold was the best form of money.
• Today, though, using gold is basically illegal, so the most widely used “money” is unfortunately U.S. government riba debt (U.S. Treasuries).
• This is what big investors and countries rely on.
• For example, if Norway or Saudi Arabia’s wealth fund wants to sell $5 billion in a single weekday, the easiest and safest place for them to do so is via the U.S. Treasury market.
Moro Blanco 
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