Paper Money

What is paper money?  And, more specifically what are "paper profits" and "paper losses"?

Recently, I was watching this video, when John, the author, used the term "paper money" to refer to "cash" as well as "contracts", because both were printed on paper.  (Ignore that cash is now printed on plastic).

Now, as I've said before, I'm not one to be picky about definitions, but I do take note when I think that someone is using a definition that seems different to my own, as well as being different to what I believe is common usage.

My understanding of "paper money", and again, more specifically, "paper profits" and "paper losses", is that it refers to unrealised capital gains.  For example, when an asset that you own temporarily doubles in price, you have a "paper profit" of 100%.   The term "paper" is used because a) the asset (eg stock) price, was published in the newspaper, and b) because when you update your personal "paper" balance sheet to reflect the updated market price, you write down the 100% profit. 

In this way, neither "cash" nor "contracts of ownership" are considered "paper" money.

Why is this important?

Because the whole concept of "market value", and, more specifically, the extrapolation of the market value of the most-recently transacted shares to the total value of all the shares, ie, "market capitalisation", I believe to be erroneous.  I hope to cover the details of that belief sometime in the near future.

But for now, in conclusion, thinking that "paper profits" are real is somewhat delusional..