Hard currency (notes and coins) is considered the most liquid monetary asset there is
It can quickly be turned into money (liquidity)
This is very convenient, but currency does not hold its value as well as other assets
It does not earn interest and its real value drops during periods of inflation
A dollar remains a dollar, but due to inflation its purchasing power will be less
Less liquid assets (savings, art, land) earn interest or appreciate in value
They are not as affected as money is by inflation, although they are harder to convert to money
| Previous slide | Next slide | Back to first slide | View graphic version |