Money is NOT wealth. Money is merely a measurement of wealth, a yardstick if you will.
To explain myself, I have to go back a long ways, back before there was any concept of wealth, back to the hunter-gatherer stage of humanity. Back then, wealthy meant you weren’t hungry. It meant that you had sufficient skills and energy to provide food for yourself and your family. If you were really good, you didn’t have to spend all day every day hunting and you wound up with some free time as well. This was the beginning of wealth. Skills gave you food, food gave you energy, skills and energy gave you time, and time allowed you to think about and improve your skills. Wealth was (and is) a surplus of time and energy.
Technology began as a means of multiplying an individual’s time and energy. Agriculture was a powerful multiplier. Weapons allowed us to take the time and energy of others and use it for our own purposes. The technology of slavery. Combine the two and now you have slaves working your fields. You no longer need to work so you have all of your time, and your slaves are producing more than you and they together can consume, so you have a surplus of food as well, food that represents the time and energy of your slaves. Your neighbor’s land is not as fertile as yours, but he has learned how to build mud huts. He’s willing to build a mud hut for you and your family if you will give him some food. Now you have a surplus of food and a mud hut, but it still is derived from the time and energy of your slaves. Wealth is still nothing more than a surplus of time and energy.
As societies increase in complexity, the simple exchange of food for labor gets to be a bit cumbersome. Trades go to 4 or 10 or even more layers of depth. The man building the mud huts becomes a skilled stone mason who needs the assistance of a carpenter and both of them need people in the surrounding areas to gather raw materials. Our farmer can now grow enough wheat for his own use, including his slaves and has a surplus that can feed a hundred families. He (or she) already has a fine stone house and all the necessary tools (manufactured by others) to continue farming for many years, and if they merely hold onto the food produced it will spoil, wasting all that time and energy. Something has to be done! Fortunately, the people in the next settlement have found a soft shiny rock and learned to shape it into pleasing objects. They call it gold. Now our farmer has a significant surplus of food, a fine house, and a quantity of gold. All of which came from the time and energy of people.
Can you see where I’m going yet? Gold was replaced with fiat currency, an act that is arguably a mistake, but nonetheless, wealth is still merely a buildup of surplus time and energy. Today, we buy a car with dollars. We acquired those dollars by exchanging our personal time and energy for them. When we purchased the car we effectively paid for the time and energy of factory workers, steel workers, miners and all the hundreds, perhaps thousands of others involved in the creation of the car. Everyone’s time and energy is involved in the economy, and as long as there continues to be a market for all that time and energy, the economy will be healthy, right?
Wrong. The market for all that time and energy is always there. Everybody always needs to eat, clothing has become a necessity, and it's really handy to have a house to keep the rain off and to store your food in. Everyone you know, everyone I know, and everyone they know is willing to exchange their time and energy for these things. Those who are able to provide these things are willing to accept the time and energy of others in the form of food and the myriad of stuff available in the modern world. The problem in a bad economy is the medium of exchange; the yardstick.
People tend to forget that the measuring stick is not the thing measured. The milestone is not the mile. A person with a million pieces of paper that say “dollar” on them, or a hundred pounds of gold has nothing. He can’t eat it, it won’t shelter him in a storm and it's not really good at clothing him either. Unless he can convince someone who has an excess of food to take what he has in exchange, he’ll starve. Money is not wealth. Wealth is the product of time and energy. Money can only represent wealth if both people involved in a transaction agree that it does, and then they also have to agree on the amount of time and energy, in the form of goods and services, it represents. Unless this agreement is reached, the money, whether is fiat currency, gold, gemstones or willing virgins, HAS NO VALUE!
Ok, I went too far with the willing virgins, but the point still stands. Money is not wealth.