What is money

14 Sep

Until arriving at the form we know today, money went through several changes, at the beginning, historians say that around the 7th century BC. coins in gold and silver appeared, which had an equivalent value to the goods that were purchased, thus avoiding the difficult direct exchange of goods, a rudimentary economy called barter.

In the Medical Age, the custom of keeping coins with goldsmiths arose and, as a guarantee, a receipt was given, this is the origin of “paper money” or paper money as we know it today, to avoid counterfeiting the type of paper and printing. It got more sophisticated.

Gold keepers are the origin of modern banks, so they had the “ballast”, the gold equivalent of the value of the commodity, and indebted people could deliver their goods in jewelry, other and silver for pledge, a kind of guarantee they would pay. debt in the future.

The equivalent in commodities was called ballast, and the value that each commodity had depends on its price. Initially, trades were carried out in ports or in places where commodity buyers went to trade, the modern form is the stock exchanges.

With the banks having the real values ​​in gold and silver, they could offer credit to buyers and investors both to produce goods and to pay debts or make some type of investment in markets that they believe to be promising, with the electronic and digital universe credit cards emerged, modern version of borrowers’ letters of credit in banks.

The financial market has become more sophisticated and today it is itself a type of “commodity”, stronger nations start to have a stronger “currency”, in practice however this does not have an equivalent or an exactly corresponding value in goods and this leads to a financialization from the market.

Currency itself, or its equivalent, takes on a value that is often artificial and this comes into play in trade wars around the world, so, for example, Russia wants to receive for the sale of its gas and oil the equivalent in rubles (Russian currency) and not in dollars or euros (US and European currencies, respectively) and this is commoditization.

It would be a return to the initial values ​​of barter equivalents, a reorganization of the entire world economy into equivalent commodity values, and this would remain free trade.



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