The Advancement of Finances Through the Electronic Age
Money is as Fast as the Transportation of an Age
Finances are a reflection of the development of an economy, nation or civilization. They can only go as fast as the transportation and energy of that age. Consider the original form of money used for barter: grain, tobacco or cattle. These were cumbersome, unwieldy forms of money tied directly to the land. Ancient finance was centered upon the property – how much land could produce what types of crops to be sold in the local economy. Loans reflected the agricultural production of the land. It was a system that moved at the speed of someone walking.
Gold and Silver Coin Standardization
Over time, more transactions were conducted with distant towns, cities or nations. These areas did not use the same type of crops for barter. Some agricultural products would spoil or require feeding (like cattle) for transport. Metallic coins were the answer. Metallic coins date back at least to 2000 BCE in ancient Babylon. These coins were standardized in Lydia (modern Turkey) in the 7th century BCE. Most were oval nuggets of bronze, silver or gold. The Richest Man in Babylon by William Cole is the story of how a man rises from slavery to wealth. Bankers began to accrue large amounts of gold and silver to be loaned to the owners of caravans or ships for buying supplies and paying wages in the importexport business.
Kublai Khan Founded the American Paper Dollar
Tell your friend that Kublai Khan founded the American Paper Dollar and watch his reaction. In 1273 A.D., Kublai Khan’s Mongol Empire was the first government to issue paper bills as currency. Paper bills are also called “fiat currency” because the value is derived from the “authority” of the government. Unlike previous forms of money, paper bills have no real intrinsic value. They can be printed ad infinitum by governments that want to artificially increase their wealth. These governments simply change a picture, color, design or number to change its value. Unfortunately, this can lead to hyperinflation. If your friend still doubts your statement about Kublai Khan, remind him that Marco Polo from Italy visited the Mongol empire and brought back paper money. Italian city-states dominated commerce due to the influence of the De Medici Bank, which developed modern banking accounts using paper receipts for credits and debits. Just as the airplane was perfected in the United States, the paper currency was mastered in America too. The American paper dollar became the global reserve currency of exchange. Nations would buy dollars to purchase goods and services from other nations.
Quick Silver Capital
With the development of the computer and Internet, money is now in digital format. Modern finance moves at the speed of light. Electronic money is being created every second by online sites and online merchant payment systems. All paper currencies are in decline according to the book, The History of Money by J. McIver Weatherford. The modern development of electronic money has overshadowed the old, tattered paper bills of yesteryear. With the transition to electronic finance, banks have created a debt-based system where money is debt. When an individual, business or government receives a loan, more money is created. This is the exciting phase we live in for money and finance.