Monetary Item
Categories: Econ
A monetary item is immune to inflation and doesn’t gain interest: it’s an asset or debt that’s always worth what it’s worth, now and in the future.
So...not stocks or assets...not property, or water...what is a monetary item?
The most popular? Cash. A dollar is always worth a dollar, nominally. Sure, the purchasing power of a dollar changes over time because of inflation, as do most things, but not cash. Love is love is love is love, and a dollar is a dollar is a dollar is a dollar.
Besides cash, debt (more commonly known as a liability in firm-terms) is a monetary item. If you owe your buddy $50, you still owe him $50 next year (bad you, friend who hasn’t paid back your friend in a year), assuming he’s not charging you interest for inflation. What a nice guy your friend is.