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The essence of finance is value circulation. There are many kinds of financial products, including banks, securities, insurance, trusts and so on. Finance involves a wide range of academic fields, including accounting, finance, investment, banking, securities, insurance, trust and so on.
Finance is a trading activity, and financial trading itself does not create value. Then why does it make money in financial transactions? Mr. Chen Zhiwu believes that financial transactions are a way to realize future income, that is, tomorrow's money will be spent today. If we spend more money tomorrow, will it cause inflation?
Simply put, the frequency of financial transactions is an important indicator reflecting the economic prosperity of a region, a region and even a country. The concept of traditional finance is a subject that studies the circulation of money and funds. The essence of modern finance is the capitalization process of business activities.
Gold once became the only medium of international trade. In the era of barter economy, businessmen can only carry out counterpart transactions and barter. Therefore, human economic activities are greatly restricted. In the era of gold standard economy, value and wealth are based on physical assets-gold. This objective physical method is very beneficial to the stable development of the global economy.
However, as the carrier of value circulation, gold's disadvantages, such as inconvenient physical conditions such as handling, carrying and conversion, make it give way to more flexible paper money (currency). One of the important macro factors that triggered the global financial crisis is the global trade imbalance.
Nowadays, the monetary economy not only replaces the original barter economy, but also covers the gold standard economy. Monetary economy brings unprecedented economic freedom to mankind, but also brings many troubles and problems to mankind, such as unbalanced world trade, inconsistent values, inflation, currency depreciation, ups and downs of economic development and so on.