Liquidity is a term to describe cash, or money at hand. It points to the element of money being in flow. A liquid wants to flow. Also money likes to be in flow. When too much money is not in flow, a certain tension arises. We can look at liquidity as being a mirror of goods and services, which are also in constant flow. We do an economic activity and this is reflected in a money stream. Both streams of energy are going in the opposite direction. When I buy some food, I take it from the shelf, put it on the cashier and pay for it. The money is going out of my pocket into the pocket of the foodshop. And the food is going from there into my food basket. On this level of liquidity we can speak also about purchase money. We can consider three different qualities of money, with many differentiated forms in between. One is purchase money. A direct reflection of goods and services exchanged. Then there is loan money. This money is given to somebody for the longer term, one year, several years, or 10 to 20 years, or even longer. when somebody receives such a loan she or he can do something with it, invent something, use it to build a house, or many other possibilities and pay it back over time, including interest rate. Then there is the third form of using money: making a donation, give it away as a gift, use it for purposes, which by itself are not so easily able to earn money. Such activities are for instance cultural activities, arts, health care, care for the homeless, education, research, innovation in its early stages, and many others. The term liquidity points to the flow of money in all these different forms and areas. Money in this regard is an extremely fluid element which often is difficult to grasp, to see, to understand in its effects and functions. We need to develop a certain sensing and perception ability, to learn to ‘see’ this flow, this liquidity of money in flow. This is a research question also: how can we learn to ‘see’, to ‘perceive’ money in flow and from all different angles of economic activity? (this blog is inspired by the book Liquidity. Flowing Forms in Water & Money by Stephen Briault and Angus Jenkinson, Tobias Press, Forest Row 2016, given to me by a friend). 

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