What is the real ... money or currency? Quite simply, they are real! The obvious question is what is a real value? In a word, to understand the significance of this difference, we should get a taste of history. I know many of us have heard about the sunken ship loaded with treasure huge cargo of gold and precious jewels, etc. Ever wonder why these ships were loaded like this? We have also seen or heard about pirates and the like ... Quite simply, the World Trade traditionally done by the movement and transport of "real money" - gold and silver money only conventional trade in all countries.
Obviously this is a high risk area, and to reduce the risk of each trip, corporate structures are created. (eg, administrators can not be sued or lose more than they have ventured to risk). This is the beginning of enterprises and limited liability companies, etc. that we use today. The big question then is: "How can we continue to trade without risking the loss of our wealth?" Gold and silver.
The simple answer is to create a "Note". Basically a third country or company would have written an account that had to be backed with real money (gold or silver) to be held in reserve or the bank. Without the support of the bill for real money or "Note" is useless. After a particular season or years, the books are balanced. The trade balance is calculated, and the money can be physical, "called" by the owner of the surplus note is. One with a deficit may be asked to pay.
Because it works so well, governments have taken control of the release of these "Notes" and began publishing / print general circulation. Of course all the time, these original "Notes," which became "Change" were actually backed by gold and silver.
At the same time, money, communications within the country is actually minted gold coins, silver, etc. It's a long story would devaluations few of these coins from mixing with cheaper metals, thereby creating money from them. Needless to say, in the course of history, the collapse of all great nations and countries have begun to price each time a country or government and then devalued its currency. How does it work? Simply by creating money from nothing that is not backed by gold or silver. This is known as "Fiat currency", and is always only one thing worth, and the government is unable to pay its debts. If people lose confidence in their government, history has repeatedly shown that people fall back on real money, silver and gold. I think it can not happen today? Who knows? However, they are interesting times.
So you have a large, brief history of money and currency. I understand some historians may be disappointed by my lack of accurate data, but precise details can not be covered in nuts. I am not against the government, I believe that companies need a wise leader. Children who initially wrote the U.S. Constitution was pretty well sussed, it would be nice to have the spirit of that document is still in force today and unpolluted.
The Best Money System
8 years ago