Perhaps the folded paper in your wallet. Or the balance in your bank account.

Or perhaps the investments in your brokerage account.

In our modern financial system where unelected central bankers wield totalitarian control over the financial system, all three of these are forms of money.

But the relationship between them is very tenuous, and very risky. I'll explain:

1) Physical cash

No matter where you live in the world, just about every civilized nation on the planet has some form of physical currency in various denominations. Dollars. Pounds. Euros. Yen. Renminbi.

We pass around these pieces of paper as a medium of exchange.

You can go to the grocery store, and, as long as you're in the US, you can pay for your food with US dollar physical cash. Or if you're in Canada, with Canadian dollar physical cash. Simple.

2) Bank balances

This is where it starts getting more complicated.

When you log in to your bank's website, you see a balance printed on the screen. Let's say it's $100,000.

Don't think for a second that there are one hundred thousand pieces of paper sitting in your bank's vault. In fact most banks have very little cash on hand.