Table of Contents
How long has gold and silver been used as currency?
Gold and silver became de facto money around 600 BC when they were struck in Lydian coins as stores of value used for trade. For over 2500 years, silver and gold monies have proven themselves as the ultimate monies. Silver & Gold indeed have the best historic track records as money.
How long have metal been used for money?
The use of metal for money can be traced back to Babylon more than 2000 years bc, but standardization and certification in the form of coinage did not occur except perhaps in isolated instances until the 7th century bc.
Why is money made of metal?
Typically coins of higher value are made of metal of higher value. Metals are durable. Unlike stone, they won’t shatter; unlike wood, they don’t burn easily and are hard to break. Metals are easy and cheap to form and stamp.
How did money change over time?
To recap: currency evolved from barter, to bartering with set mediums of exchange, to coins representing exchangeable goods, to coins stamped in precious metal, to paper representing coins, to notes representing gold or silver, to being redeemable exclusively for gold, to the end of the gold standard.
Why does the value of money decrease over time?
Also, I bet there are many complicated reasons for the value of money decreasing over time, but one of those reasons is definitely inflation. Inflation increases prices -> You can buy less goods for the same money -> Your money value has effectively decreased.
How did the Gold Rush lead to inflation?
Because precious metals were at the base of the monetary system, rushes increased the money supply which resulted in inflation. Soaring gold output from the California and Australia gold rushes is linked with a thirty percent increase in wholesale prices between 1850 and 1855.
What happens to the value of money when it falls?
A little more and you will see the money lose value (inflation); a little less and the money will gain value (deflation). As long as the value of inflation or deflation remains very low, the specifics matter relatively little.
Why is money so valuable?
Think of it this way: Money is valuable because it is money. The reason is governments print extra money to cause inflation (hopefully reasonable) so that people don’t just sit comfortably but do something to make money work.