Joko held the position of accountant at the XYZ branch of the company in Jakarta, while Jack also held the same position as an accountant at the XYZ branch of the company in New York. Every month both receive a salary at a different currency rate. Every month Joko receives a salary of 10 million rupiah, while Jack receives a salary of 10 thousand US dollars.

Both Joko and Jack set aside their monthly salaries as savings. Joko sets aside 5 million rupiah every month while Jack sets aside 5 thousand US dollars as savings. If multiplied, in a year, Joko’s savings are 60 million rupiah, while Jack’s savings are 60 thousand US dollars.

At the end of the year, Joko and Jack both went on vacation to meet in Bali, Indonesia. Joko brought 60 million rupiah while Jack brought 60 thousand US dollars from saving them for one year. While in Bali, Jack exchanged savings in the form of US dollars into Indonesian Rupiah.

Jack’s money of 60 thousand US dollars was exchanged for Indonesian Rupiah money, then it became 900 million rupiah (conversion rate of 15,000 Rupiah per US Dollar). While in Bali, Jack’s money became much bigger than Joko’s money (900 million vs 60 million rupiah). Automatically, Jack’s purchasing power is 15x greater than Joko’s.

However, the opposite did not happen when Joko decided to visit Jack in New York, United States. Joko’s savings of 60 million rupiah if converted into US dollars, then into 4 thousand US dollars. In other words, when Jack visited Indonesia, Jack’s money became 15x larger than Joko’s.

Meanwhile, when Joko visited Jack to the United States, Joko’s money became 15x smaller than Jack’s money. In fact, both Joko and Jack work as accountants in the same company, daily doing the same work, using the same work tools, and both set aside half of their monthly salary to save.

Based on the illustration about Joko and Jack above, we might think it is normal to happen because of currency differences which also have implications for differences in the cost of living in each place. Basic living costs such as food, clothing, and boards at Jack’s place in New York which uses US dollars make it look very expensive when measured in Indonesian Rupiah.

However, the author sees that the difference in exchange rates is not something that is natural to take it for granted considering that we currently live in a world era where the boundaries between space and time are narrowing or called the era of globalization.

Relations between people from various places and countries in various parts of the world are becoming more and more frequent, so the issue of monetary affairs is a challenge to justice for mankind.

The Global Monetary System that makes up Geopolitics

The concept of money has been around for centuries, but only in the past few decades has the use of fiat currency become widespread. In this article, we’ll look at the history of how fiat money became part of our daily lives and why it matters today.

We’ll also explore the implications for foreign exchange markets and how this might affect our own finances. The term “fiat” comes from the Latin phrase “let it be done,” and it is used to describe a form of currency that is not backed by any physical commodity.

Instead, fiat money is created and maintained by a government or central bank. This means that its value is contingent upon public confidence in the issuing authority. Historically, this has taken the form of coins and paper notes issued by governments or other financial institutions.

Fiat currencies have been around for centuries, although they have only become widely used in the last few decades. Before the 20th century, most currencies were based on gold or silver, and were therefore backed by a physical commodity.

However, in 1971, the world’s major economies came off the gold standard, and began to allow their currencies to float freely against each other. This marked the beginning of the modern fiat monetary system.

The switch to floating exchange rates made it necessary for central banks to intervene in foreign exchange markets to maintain stability. To do this, they started using foreign exchange reserves as a tool of monetary policy.

The fiat monetary system is a system in which the money supply is not backed by any physical commodity. Instead, the value of fiat money is based on the faith and credit of the issuing government. This type of money was first used in China during the Song Dynasty, and later became widespread during the Renaissance.

The use of fiat money has been controversial throughout history, and its critics argue that it leads to inflationary booms and busts. However, proponents of fiat money argue that it allows governments to better manage their economies and provide a stability that would otherwise be absent.

The advantages of the fiat monetary system include increased economic stability and lower inflation rates. Since the value of fiat money is not tied to any physical commodity, governments can more easily adjust their money supply in response to changing economic conditions.

This allows them to better manage inflation, as they can increase or decrease the money supply at will. In addition, since there is no need to maintain reserves of gold or other commodities, governments can use their resources more efficiently.

However, critics of the fiat monetary system argue that it leads to financial instability and rising prices. They point out that since governments could print money without maintaining a reserve, they can create large amounts of currency which leads to inflationary pressures.

Furthermore, governments may be tempted to print too much currency to finance their spending programs, which could lead to hyperinflation and a collapse in the value of the currency.

Despite its detractors, the fiat monetary system remains a cornerstone of modern economics and has been adopted by most major economies worldwide. It has allowed governments to manage their economies and provided greater financial stability than would otherwise be possible with a gold-backed standard more effectively.

The illustration of Joko and Jack above is an illustration of the state of the monetary system today at the level of relations between individuals. At the level of relations between countries, this phenomenon is reflected in the prices of world commodities such as Petroleum, Natural Gas, Metals, Minerals, Plantation Products such as Palm Oil, Rubber, and Wheat whose prices are currently measured in US Dollars (USD).

Those things led many nations in competition to rule global trade that result in geopolitical conflicts. In the past time, nations and countries are fighting each other to get as many as possible of natural resources, but now all they need is to influence other nations and countries to peg their currency as legal tender with their currency. in the International Market. As of this writing, the price of coal minerals is 259 USD per Ton; in other words, if Joko and Jack use all their cash to buy coal, then Joko’s savings money can buy 15 tons of coal while jack’s savings money can buy 230 tons of coal.

This means that if the coal is converted into energy, Jack has 15x more energies than Joko’s. Jack’s ability to buy more energy sources than Joko is what then becomes an advantage for Jack when competing with Joko even though coal itself is widely produced in the country where Joko lives, Indonesia.

If those individual relations translated in politics among nations, The countries that has stronger currency will be more benefited than countries that has weaker currency in global trade.

Cryptocurrency as a New Gold?

As technology continues to evolve, so does our idea of what constitutes “currency”. With Bitcoin and other cryptocurrencies becoming increasingly popular, it begs the question: Is this digital form of money the new gold?

Bitcoin is a decentralized digital currency, without a central bank or single administrator, that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries. Transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain. Bitcoin is unique in that there are a finite number of them: 21 million.

Cryptocurrencies are digital or virtual tokens that use cryptography to secure their transactions and to control the creation of new units. Cryptocurrencies are decentralized, meaning they are not subject to government or financial institution control. Bitcoin, the first and most well-known cryptocurrency, was created in 2009.

Cryptocurrencies are often traded on decentralized exchanges and can also be used to purchase goods and services. Bitcoin and other cryptocurrencies are digital or virtual tokens that use cryptography to secure their transactions and to control the creation of new units.

Bitcoin and cryptocurrency are a new and exciting way to store and spend value. Unlike traditional currency, which is regulated by central banks, bitcoin and cryptocurrency are decentralized, meaning they are not subject to government control or manipulation.

Bitcoin and cryptocurrency are also much faster and more efficient to use than traditional currency. Transactions can be completed in minutes, rather than the days or weeks it can take with traditional currency. Bitcoin and cryptocurrency are also more secure, as they are not subject to the same fraudulent activities that plague traditional currency.***