💸 Near Money: Almost As Good As Cash, Just Not Quite! 💸
Hello dear money magicians and financial aficionados! Today, let’s hop on our imaginary money train and journey through the fantastical world of near money, also known by its enigmatic superhero alias: quasi money. It’s that curious realm where assets are almost cash – just not quite there to make it to the exclusive cash club.
What is Near Money?
Near money isn’t just wandering around the outskirts of Cashville for no reason. These assets can be quickly converted into something that will buy you a cup of coffee (or pay your debts) but are not quite as liquid as the folding stuff in your pocket.
Examples of near money? Think about bills of exchange. These are like IOUs with a splash of elegance and a twist of rigorous commitment! They are transferable and useful but aren’t quite walking into the room with the swagger of cash.
Near Money - The Chart of Mystique!
Let’s demystify this a little bit more with a Beach Ball sized chart, shall we?
graph TD
A[Currency] --> B{Money Supply Definitions}
B --> C(M1: Banknotes & Coins)
B --> D(M2: Savings Deposits, Certificates of Deposit)
B --> E(M3: M1 + M2 + Other near money)
E --> F(Near Money: Bills of Exchange)
As depicted, near money tries hard to squeeze into the money supply definition but eventually finds itself lurking close to the edges of M3. A bit of an outcast, isn’t it?
Why Should We Care About Near Money?
You might be wondering why these money wannabes even matter. Well, it’s because near money can settle some debts, and that
