Debt : The essence of wealth is ‘debt.’ Liabilities are regarded as debt capital and included as assets in accounting . Isn’t it odd? Debt is classified as an asset... The fundamental idea that currency is created based on the principle that debt arises is crucial. Debt can serve a positive purpose by lowering opportunity costs , but it can also be harmful if not repaid, as it deprives others of their opportunity costs since it must be paid back. Managing debt properly is essential for a company's capabilities in certain situations. Understanding others’ debts can help maintain good credit. However, there are limits to examining others’ debts. Instead, we can monitor the flow of money as an apparent interest rate. Therefore, recognizing and responding to interest rate fluctuations during economic activities is extremely important. - Joseph’s “just my thoughts”
What if you could fulfill your transaction benefits (considerations) in various ways, including fiat money ? Have you ever wondered what the consequences for your business would be if you could fulfill your benefits in ways other than cash? For instance, let’s say you are a shoe manufacturer . To make shoes, you must purchase raw materials like leather and process them into finished products known as shoes. At this time, if you can pay for raw materials with the finished shoes you made instead of fiat currency , you wouldn’t need to take out a loan with interest from the bank. However, the world’s economic system has limited the standard of value exchange to ‘cash,’ commonly referred to as fiat money. We need to understand precisely why banking is so important to entrepreneurs. This is one of the reasons the industry does not surpass finance. After all, money is among the goods whose value is determined by supply and demand . - Joseph’s “just my thoughts”