After recent investigations I have been able to formulate a much better understanding of the consequences of wealth divides socially and economically. It has been a priority to create some kind of visual representation and clear to understand text that with help people understand in a simple way a complex situation. Money is a huge mystery to many people as it is constantly manipulated and distorted by different parts of society. Money troubles most people in one way or another but due to how complex it has become, most people are resigned to hoping it keeps working, but they don’t feel like thy have any control over it.
Everyone remains concerned about it remaining stable and reliable, but it never does, and no one ever really understands why. A well managed and stable currency is ultimately a system which is resilient to many different pressures. There are few cases which this has been proven to be the case. Recessions, corruption, and wealth divides have caused poor and wealthy countries repeated problems.
The financial wealth of someone is valued by people who use the same currency. The perspective of what they are able to do with the wealth is based on a trust that others also recognise the value of the currency to a similar value. eg: I have a loaf of bread to sell. One person offers me 1 euro for it and another offers me 5 euros for it. If I know I can buy 1 chocolate for 1 euro, then I will be happy to take the 5 euros as I know I can buy 4 more chocolates.
The trouble comes when I am not sure how much the chocolate will cost. Judging by what the two people are offering for my loaf of bread the euro could be worth 5 times more or less than what I understand. The only way to have some kind of understanding of the value of 1 euro, I need to know what I can exchange it for in return for the chocolate. When I know the price for many things, as well as chocolate, then I have an even better idea of what 1 euro is worth. Loss of trust in this value of what I can exchange it for is a fundamental problem for a person’s and society’s financial security to continue functioning.
Money is a representation of wealth shared amongst people. Coins, banknotes, numbers in the bank account, are a representation of purchasing power to exchange with other people that provide services. Without the shared belief in the exchangeable value of the currency the coins and bank notes are worthless pieces of metal and paper. This shared value is something that belongs to everyone that is dependent on that currency. Everyone is constantly using it and deciding if they wish to pay a certain amount for an exchange of service. No matter if you are buying food, clothing, medicine, toys, cars or anything else, the value of the currency belongs to what someone is willing to exchange for it.