''ALL MONEY IS A MATTER OF BELIEF''

 BY RATTANDEEP SINGH | 2 min Read

 In this quote Adam smith illustrates how the modern financial system is built upon just confidence and belief. This has been a prime fallacy of monetary systems from centuries, as all their economies were built upon trust and confidence. This trust and confidence was eroded several times in the past and was always followed by a great economic collapse. So when Adam smith links money with belief, he also talks about how the erosion of this confidence has led to not only economic but political and social repercussions often followed by a great political collapse and a social revolution. This very belief when eroded can bring even the mightiest of the economic and political superpowers to their knees, be it the roman empire, the German Weimar republic, or the once mighty south American nations of Argentina and Venezuela.

Governments and politicians all over the world strive to preserve this very belief and confidence in the economy and the political system at each and every juncture, which allows nations to function without turmoil.