Money: a peek into the history
Updated: Sep 12, 2020
Money, where does it come from?
think back to the early days where you had 10 Eggs and you needed a set of new shoes but the shoemaker had also Chickens, so he would not trade the 10 Eggs for a new set of shoes. So now what did you need to do to get these shoes?
you could go out and find something the shoemaker would trade the Shoes for or would there be a better solution?
Historians still speculate on where or when money was initially invented as it took place before the beginning of written history.
Non-monetary exchange - everything is money
The Greek philosopher Aristotle contemplated the nature of money. He considered that every object has two uses: the original purpose for which the object was designed for, and as an item to sell or trade for an object of greater value or utility.
With Trade, an individual possessing any surplus of value for himself, such as a measure of eggs he needs, could directly exchange it for something which is perceived to have similar or greater value or utility, such as a tool or, however, the capacity to carry out trade transactions is limited in that it depends on a coincidence of wants. For example, a farmer has to find someone who not only wants the grain he produced but who could also offer something in return that the farmer wants.
Finding people to trade with is a time-consuming process and this factor is most likely the main driving force that leads to the creation of monetary systems – people seeking a way to stop wasting their time looking for someone to trade with.
However, this assignment of monetary value to an otherwise insignificant object like a coin or promissory note arises, as people acquired a psychological capacity to place trust in each other and in external authority within a trade exchange or market.
#monetary exchange - money can buy you anything
the Monetary System started around 5000 BC with the exchange of sculptures and later developed into Coins mostly made of precious metals and this system was kept this way for more than 6000 years. In the early 17th century where scriveners were first to keep deposits for save keeping or relenting and #Goldsmiths mainly stored the gold for safekeeping in their Private Vaults, the goldsmiths issued paper receipts certifying the quantity and purity of the gold they held which was the begin of the first Paper notes.
Those goldsmiths later took also over the part of the lending, which you could see as the first types of banks, and led to an overwhelming number of different types of documents assuring value stored within a Vault.
Inspired by the success of the goldsmiths, some of whom became the forerunners of great English banks, they began issuing paper notes quite properly termed "banknotes", which circulated in a similar way that our government-issued currency circulates today and this practice continued up to the late 17th century. In the United States, this practice continued through the 19th century, was at one time there were more than 5,000 different types of banknotes issued by various commercial banks in America. Only the notes issued by the largest, most creditworthy banks were widely accepted. The scrip of smaller, lesser-known institutions only circulated locally and lost acceptance farther from the original origin.
The money came a long way since back in the days but there was a silent development in the resent days. at the end of the 19th-century money was wide #Representative money which generally certificates, that can be reliably exchanged for a fixed quantity of a commodity like #Gold. The biggest problem of the 19th century was the acceptance of the banknotes of unknown origin, which required governance from higher authority for a working international market. The term fiat derives from the Latin fiat ("let it be done") and is used in the sense of order.
Gold coins are an example of legal tender that are traded for their intrinsic value, rather than their face value.
Fiat money or fiat currency is money whose value is not derived from any intrinsic value or guarantee that it can be converted into a valuable commodity (such as gold). Instead, it has value only by government order (fiat). Usually, the government declares the fiat currency (typically notes and coins from a central bank, such as the Federal Reserve System in the U.S.) to be legal tender and making it unlawful not to accept the fiat currency as a means of repayment for all debts, public and private.
So yes the #FIAT is a governed Currency by the state of each country which allows the international market to function, but who determines the worth and where is the catch?
Stimulation of growth with #devaluation..
For the US it started in 1971 with the Nixon-Shock where Richard Nixon (President of the USA 1969 to 1974) declared in response to the increasing inflation, several changes to the Bretton Woods system which controlled the money management in the western world. The most significant of which were wage and price freezes, surcharges on imports, and the unilateral cancellation of the direct international convertibility of the United States dollar to gold.
While his changes gave a momentary relief to the Economy but were not able to fully abolish the inflation of the currency.
Gold is a Constance but Gold is for Rich People
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