Money History: Unlocking the Vault of Time, a Journey Through Money History

By Fouad Sabry

What is Money History

The history of money is the development over time of systems for the exchange, storage, and measurement of wealth. Money is a means of fulfilling these functions indirectly and in general rather than directly, as with barter.

How you will benefit

(I) Insights, and validations about the following topics:

Chapter 1: History of money

Chapter 2: Currency

Chapter 3: Coin

Chapter 4: Gold standard

Chapter 5: Commodity money

Chapter 6: Cash

Chapter 7: Banknote

Chapter 8: Philippine peso

Chapter 9: Indian rupee

Chapter 10: Monetary system

Chapter 11: Token money

Chapter 12: Silver standard

Chapter 13: Dutch guilder

Chapter 14: Japanese currency

Chapter 15: Money

Chapter 16: Korean currency

Chapter 17: Metallism

Chapter 18: Credit theory of money

Chapter 19: Fiat money

Chapter 20: Chartalism

Chapter 21: History of Philippine money

(II) Answering the public top questions about money history.

(III) Real world examples for the usage of money history in many fields.

Who this book is for

Professionals, undergraduate and graduate students, enthusiasts, hobbyists, and those who want to go beyond basic knowledge or information for any kind of Money History.

• Language: English
• Publisher: One Billion Knowledgeable
• Release date: Feb 15, 2024

Book preview

Chapter 1: History of money

The evolution over time of systems for the exchange, storage, and measurement of wealth constitutes the history of money. In contrast to barter, money serves these services indirectly and generally rather than directly.

Money can exist in physical form, such as coins and bills, or as a written or digital account. It may have intrinsic worth (commodity money), be legally redeemable for something with intrinsic value (representative money), or have merely nominal value (fiat money).

Money was created prior to the beginning of written history. Therefore, any account of the origins of money is mostly reliant on speculation and inference.

Significant evidence demonstrates that numerous goods that may be described as a medium of exchange were traded in ancient markets. These included animals and grain — things that were directly practical – as well as decorative products like as cowrie shells and pearls that were exchanged for more utilitarian goods. The common bartering of a particular commodity (especially when the commodity items are not fungible) does not properly make that commodity money or commodity money like the shekel, which was both a coin symbolizing a certain weight of barley and the weight of that bag of barley. bolsters the notion that money has existed in two primary forms, broadly categorized as money of account (debits and credits on ledgers) and money of exchange (tangible media of exchange made from clay, leather, paper, bamboo, metal, etc.).

The tally stick was a major innovation since money of account depended on the ability to record a count. The earliest dates to the Aurignacian, some 30,000 years ago.

Although not the first form of money of exchange, many metals (both common and precious metals) were used in both barter systems and monetary systems; and the historical use of metals gives one of the clearest examples of how barter systems gave way to monetary systems. The use of bronze by the Romans, while not among the first examples, is widely documented and exemplifies this transition vividly. Initially, aes rude (rough bronze) was employed. This was a large quantity of unmeasured bronze used in what was likely a trading system: bronze's appropriateness for barter was based primarily on its use in metalworking, and it was bartered with the intention of being fashioned into tools. The next historical development was bronze in bars with a pre-measured weight of 5 pounds (likely to make trading easier and more equitable), known as aes signatum (signed bronze), which raises the question of whether this was still barter or had become a monetary system. Lastly, there is a clear distinction between the use of bronze in trade and its undeniable use as money, as lighter measures of metal were never intended to be used for anything other than coinage. The aes grave (heavy bronze) (or As) marks the beginning of coinage in Rome, however it is not the first example of metal currency known.

Throughout history, gold and silver have been the most prevalent kinds of currency. In a number of languages, including Spanish, French, Hebrew, and Italian, the word for silver remains closely tied to the word for currency. Occasionally, additional metals were employed. Iron coins were coined in ancient Sparta to dissuade its residents from engaging in foreign trade. In the early 17th century, Sweden lacked precious metals, so it created plate money: enormous copper slabs 50 cm or more in length and width, imprinted with their worth.

The production of gold coins resumed in Europe in the thirteenth century. During the Crusades, Frederick II is credited with having reintroduced gold coins. In the 14th century, Europe switched from using silver as currency to producing gold coins.

The oldest theories included Aristotle's metallist and Plato's chartalist conceptions, which Joseph Schumpeter incorporated as classifications into his own theory of money.

Modern economists have attempted to categorize the various types of money supply. Various central banks have classed the various measures of the money supply using the prefix M. Depending on how closely a supply is described, the supply categories can range from M0 (the narrowest) to M3 (the broadest) (broadest). The categorization are contingent on the specific policy formulation employed:

M0: In some countries, such as the United Kingdom, M0 includes bank reserves, so M0 is referred to as the monetary base, or narrow money.

The monetary basis is also known as the total currency. This is the foundation from which other types of money (such as those described below, such as checking deposits) are formed and is considered the most liquid measure of the money supply.

Bank reserves are excluded from M1.

M2 represents M1 and its near replacements.

M3 consists of M2 plus massive and lengthy deposits. Since 2006, the U.S. central bank has discontinued the publication of M3. Nonetheless, there are estimates generated by private institutions.

MZM entails money with no maturity. It evaluates the availability of financial assets redeemable at face value on demand. Historically, velocity of MZM is a relatively accurate predictor of inflation.

Assaying is the chemical composition analysis of metals. The discovery of the touchstone for assaying contributed to the spread of commodity money and coinage based on metals. On a touchstone, the purity of any soft metal, like gold, can be determined. Consequently, the use of gold as commodity currency extended from Asia Minor, where it initially acquired widespread use.

A touchstone permits the estimation of the amount of gold in an alloy sample. In turn, this permits the estimation of the alloy's purity. This enables the creation of coins with a uniform amount of gold. Typically, governments would produce coins and then stamp them with a symbol that guaranteed the weight and worth of the metal. However, in addition to their intrinsic value, coins had face value. Debasement occurs when governments reduce the amount of precious metal in a coin (thereby reducing its inherent worth) while maintaining the same face value.

There is no evidence, either historical or modern, of a culture in which barter is the predominant means of transaction; rather, non-monetary societies worked primarily according to the concepts of gift economy and debt.

With barter, a person with a surplus of value, such as a measure of grain or a number of animals, could directly exchange it for something perceived to have similar or greater value or utility, such as a clay pot or a tool. However, the ability to conduct barter transactions is limited because it depends on a coincidence of desires. For instance, a farmer must locate a buyer who not only desires the grain he has produced, but also has something to offer in exchange.

In Politics Chapter 1:9

In a gift economy, valuable goods and services are routinely given without an express contract for immediate or future compensation (i.e. there is no formal quid pro quo). Ideally, simultaneous or recurrent donations serve to circulate and redistribute communal resources.

Various social theories exist about gift economies. Some view the sharing of gifts to be a form of reciprocal altruism, through which connections are formed. Consider, for instance, the sharing of food in some hunter-gatherer tribes, where food-sharing serves as a precaution against the failure of any individual's daily gathering. This tradition may represent benevolence, constitute a type of informal insurance, or confer social status or other advantages.

Anthropologists have documented numerous instances of so-called primitive tribes employing what appears to us to be money for non-commercial purposes; commercial usage may have been outlawed:

Frequently, such currencies are never used to purchase or trade anything. Instead, they are used to create, maintain, and otherwise reorganize relationships between people: to arrange marriages, establish paternity of children, avert feuds, console mourners at funerals, seek forgiveness in the case of crimes, negotiate treaties, and acquire followers – almost anything other than trade in yams, shovels, pigs, or