Money, Gold and the Gold Standard

1. Introduction

Croesus, King of Lydians (Asia Minor), has been the symbol of wealth and power since ancient times. 650 BC he implemented his idea of making money from gold by having coins minted which then became official currency. pounds to naira black market

A new “era” had begun. The new small and handy exchange objects soon spread throughout the cultural area of the then Greek world and the adjoining regions.

Money represents the joint measure of all economic transactions. On the one hand, it is the (interim) means of exchange, which simplifies the exchange of goods (trade) amongst one another and, on the other hand, it embodies the function of the maintaining of value as well as a calculation unit.

Then, as today, money is a generally accepted means of payment prescribed by the state. The Latin word for money is “pecunia” and was derived from “pecus” = cattle.

When browsing through the history books of mankind, different objects (such as incense, wheat, metals, salt, stones, furs, shells, cigarettes, alcohol, paper money, etc.) were used as money medium, depending on the era.

Gold and silver were particularly significant here. This was and is not coincidence, because they are an ideal exchange and value maintenance medium due to their properties.

Wheat is only a luxury item in the event of a famine, but may rot and is thus not durable.

A diamond is durable and beautiful to look at, but arbitrarily divisible and similar.

Gold can be divided and melted arbitrarily and is in limited supply and has been known for centuries.

The history of money can be broken down into several steps, which may be by topic very different, but cannot be held apart in terms of time. In general, we distinguish the following steps: Natural exchange (goods for goods), natural money (a good, e.g. wheat or shells, was defined as money), metal money(full-value coins made from precious metals, expert term face-value coins, inferior to uncovered coins, expert term secondary coins),

cash (covered paper money and coins), as well as bank money is also called bank money (out money today, which is based on the creation of credit).

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