Many people confuse the crisis economy and the pandemic, thereby confusing their work with money in such different situations. What is the difference between one economy and another? What should we do in a pandemic economy with our funds? I will try to answer these questions in this article and will be glad to be of service to more people.

I’ll start with money and their value. We will look at the main factors that influence the value of money, not speculative ones. Our money serves to retain the value of what we have created and to buy goods or services in the future. Each of us,from the labor we put in, through the benefits we have from our parents shape the benefits we or they have given to the world, not consumed.

Many people confuse the crisis economy and the pandemic, thereby confusing their work with money in such different situations. What is the difference between one economy and another? What should we do in a pandemic economy with our funds? I will try to answer these questions in this article and will be glad to be of service to more people.

To give an example - a doctor in the conditions of the pandemic works for 16 hours a day, and there is only time to eat. The doctor gives much more value to society and through money it is stored for a moment when that value will be available to be used. So we don't think we've missed out on anything without reaping the benefits now, but we’ve concentrated on creating value and someday using it. We also do not have to do complex barter trade, such as the doctor treating,the farmer giving grain, chicken farmer gives chicken, the carmaker gives a gas pump, etc.

The function of money is to facilitate the process of exchange of goods and services and for people put labor in, for which they can be assured that they will receive a counter value when needed. The two main factors that play a role in the value of money are the quantity and the quantity of goods and services that correspond to the amount of money.

This is the reason why the value of money is directly determined by the amount of goods and services that stand in exchange for them. As long as there is an equilibrium between these two main factors - the amount of money and the quantity of goods and services, we have equal value for money or we can count on the fact that with one unit of money we will be able to buy the same number of goods or services. It happens that the value of money changes, and naturally we want the value of money to change in our favor or so that we can buy more goods and services with one unit of money, but unfortunately the opposite happens, we lose the value of our money and so we lose what we have earned or what our parents earned. Why does it happen?

The modern monetary system has people and institutions that regulate it. They have the right to print more money when needed (for example, the number of goods and services increases, and the number of money needs to be increased) and accordingly they change the money-value ratio. Each country has the right to print money, but all money equals the countries that have the strongest army and greatest value in the current existing system. The major currency in the world is the US dollar (we can say that they are the creators and regulators of the modern financial system) and all other currencies are converted to it.

The reason for this is that, after World War II, it is the only country with a good economy that is little affected by this conflict, and it sets out to build the world in the way it finds good. By building the financial and economic system, it holds the keys to its management. We know that what is being studied in economics is that it is good to have low inflation, because that makes the society quite and normally developing. In fact, inflation is a depreciation of money, or if we have the wealth we hold in money, then the same is slowly melting away. Why is it good for the governments in the US and other countries that print money (Bulgaria is not allowed to print money right now because it is in a currency board)? The people who run the countries (and therefore our money) benefit from the expenditures they make on behalf of the people.

Government money is used for government expenditures, which are provided by private companies. It is these companies that are associated with the ones that are in power, and so they have an inexhaustible resource from which to earn steady profits. The higher the government spending, the more money the ones in power earn. Various mechanisms are used to convince people that these costs are needed, and they will improve people's lives without people having to work (which is a dirty lie) and then private contracting firms (hidden companies of the ones in power ) deduct the profit from these government expenditures. It is important to know that these people always make a profit in assets such as factories, real estate, land, malls, businesses, and not keep them in free money and in the article you will find out why. Each year, the state has a budget that in collects from taxes, duties, excises, fines, fees and more.

This budget is used to spend and benefit the ones in power. At one point, however, they want to have more money and take a loan, a government loan. They create various financial instruments through which they take money from the ordinary person. It is important to know that everything is done with the money of ordinary people who do not know what to do with their money and give it to banks, funds, stock exchanges, government securities, pension funds, health funds. The ones in power always take people’s small amounts of money that way, which becomes a huge amount, which they unite in a system and that way the countries take government loans, promising to pay it back with interest. Ordinary people believe that the state will not lie to them (they believe in everything regulated by the state) and give their money, hoping that one day they will be richer.

Government expenditures never lead to a return on investment because of the nature of their spending, they spend so that the firms of the ones in power can make a profit and not make the lives of the people better. For this reason, everything made with government money is expensive and of poor quality. This is done for a certain period of time, for example 10 years and accumulates a debt that starts to scare people. Then a crisis is created. To understand what the standard crisis is, we will explain how people think. Everyone is self-aware on his own and thinks pretty well. However, the assembled masses think differently. The mass of people is as smart as the most stupid of its members. The media, on the other hand, are also owned by the ones in power. Most people see the world only through the eyes of the media, and it is enough for these media to create panic in the most uneducated members of society, after which to increase the propaganda for the crisis and the people massively submit to this suggestion and decide to cut their spending to see what will happen.

They believe that the money saved has worth and they keep it in cash, with some people even withdrawing it from the banks (as if there is a difference) to make them feel that their money is close them. During a crisis, consumption reduced without reducing money supply. Or we have the same amount of money, but people buy less goods and services, which in a year makes it so that they can accumulate a lot of goods and lower the cost of services, which in short time earns us money they become a smaller amount than the goods and services in total and their price increases. This is called deflation and for a brief moment we are richer in cash than we were in the past. In this period, people with cash (talking about ordinary people with money) are getting richer and waiting for a good opportunity. Some businesses start to go bankrupt and dismiss workers, while others are dissatisfied and become angry with the current situation.

 This is where the state gets involved and asks people if they want to be  helped out of the crisis and entrepreneurs and workers unanimously say "YES" because they want someone else to do their job. Then the state injects money into the economy, which is done by printing more money and thus giving the money back to the companies of the ones in power. The media is beginning to state that the crisis is about to end and that employment created by companies close to the ones in power is driving demand, which starts to increase prices slightly and then even more. Most entrepreneurs and workers are mobilized to buy, build and create turnover in the economy, and the media starts boasting that everything is going well and the times are good, saying that good years are ahead of us. Wages are beginning to rise, with prices rising as well, and this is how the ones in power have made new money additional to theirs, which they have invested in assets, and ordinary people are owners of devalued cash. This happens in the standard economy when there is a crisis and it is triggered by the government in order to depreciate money and take new loans. First, there is an increase in the strength of money in these crises, and then they are depreciated.

Now let's see how money works in a pandemic economy. We will reiterate that money must be equal to goods and services in order to have equal value. In a pandemic situation, we have a threat towards humanity. The threat is that we may die. We must remember that the so-called economy is what people produce and consume while living their lives. When there is a threat to people, those who produce and those who consume, that is, both type of people decrease, because they are busy in both production and consumption. At one such moment, money is the same as quantity, but the amount of goods and services greatly reduces. The reason is that cafes, vacations, trips, cosmetics, group gatherings, trainings, shopping malls and streets, discos and festivities all stop. That is, most of the services are not available at all. Production is also being limited because transport and supply chains are disrupted. The delivery time for components is growing sharply because the borders are closing. In modern production, which is subject to low cost, almost no manufacturer produces the things necessary for production on his own, but produces a maximum of 20% of his required components, while the rest of the components are imported.

This leads to the inability to have a finished product or the products to decline because, as much as consumption is reduced, production is even smaller and gradually decreases inventory and materials. It also reduces food production, because people are still involved in their production, and food consumption won’t decrease. This leads to a huge change in the ratio of money to goods and services, which means that there is a lot of money and few goods and services. Here are involved countries that start printing money in order to motivate people to work in a life-threatening environment and to finance all activities during a pandemic, when there is no profit in the economic, the funds used to pay for that are printed. All of the above leads to a large depreciation of money and we see that the pandemic economy is fundamentally different from the standard crisis economy.   

How do the ownders of the financial system operate in such a situation? First we need to see how banks operate and we will understand how the ones in power operate. The bank borrows money from ordinary people, for which it gives low interest rates, and collects huge fees for storage and transfers. In this way, banks even profit from the money that ordinary people give them. Then they give the money back to ordinary people, to ordinary companies (very difficult) and to the companies of the ones in power (which is easy because this system is created for them), from which they profit. Every year, the bank's profit is distributed to the owners, who invest it into assets. They do not hold free cash. This can be seen in the way the bank works, that it does not manage its own cash, instead in invests everything in assets. Cash is only for ordinary people. Whether it is a crisis or not, the bank does not lose, because it collects profits from the turnover, movement and storage of funds, and people lose their money. Also, how do the companies of the ones in power operate? They work entirely with bank funds or, in other words, they borrow their working capital from ordinary people.

In a pandemic situation, one such company buys grain for BGN 100,000,000 and sells it for BGN 140,000,000. A profit of 40,000,000 immediately converts it to assets (non-movable property or production power plants), and the money is taken back from the bank (by ordinary people). It is very likely that the second grain refill will buy it for BGN 180 000 000 because the money is depreciated, but it does not lose, because the money is not its own, but they lose ordinary people who prefer to keep their money in banknotes rather than in assets . The company will sell the grain for BGN 220,000,000 and will still earn 40,000,000 in assets. Look at the difference of thinking of the average person who will look to make money in circulation, and this is the surest way to lose them. An ordinary person who does not know how to work with credit will look to trade only his savings and funds in such a crisis (and the bank will give him a hard time with loans, because it is an instrument of the ones in power). Suppose he has BGN 100,000,000 of his money and buys 100,000 tonnes of grain for them. He sells it for 140,000,000 and tells himself “I've won”. When he decides to buy grain again, he realizes that the price is BGN180,000,000, or he will only be able to buy 70,000 tonnes of grain, because there are additional transaction costs. This means that even if he worked, he was at a loss of 30% despite the increased money supply.

This example may show us that if we want to engage in trading in a pandemic economy, it is good to use only borrowed funds. People who want to keep their money and multiply money in such an environment need to put it in assets that will be of great value after the pandemic comes out. Then the money supply will normalize at some levels and we can recover the paper money again (if we want), but in the updated value and even multiplied. It is even better if we can put them into assets that will be in high demand after the pandemic. Then we will emerge very profitable from the situation and we will not lose two years of our lives because of an emergency. We are working in this direction and we are working to create such assets. Everyone who wants to join us is welcome.