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paper money

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    Posted: 03 Jul 2009 at 06:28
When was paper money first used? How did it get accepted when using metals was the norm?
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Post Options Post Options   Thanks (0) Thanks(0)   Quote ResoundingEagle Quote  Post ReplyReply Direct Link To This Post Posted: 03 Jul 2009 at 07:27
A good question. I 'm not sure on exact origin.

In my own country, the US,  it was more widely used after the first Depression in the early 1900's, (not the Great Depression of the 30's), which was evidentially orchestrated by the Rockefellers' and Rothschilds', as an attempt to get people more trusting of central banking and provide a source of currency that, most notably, influential men can control at their will.

I'm not saying this was their intention, as I can only speculate in that regard, but the obvious unfair advantages such currency creates is all too clear. When the 'scare' worked, they also got laws passed indicating that people must turn in all gold, valuables, and other forms of currency that were previously in use, and instead only use the new paper currency, therefore robbing all Americans of anything else of trade worth and value, and ironically, setting up a system that we originaly left England to avoid, as documented in the wirtings of various American forefathers.


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Post Options Post Options   Thanks (0) Thanks(0)   Quote gcle2003 Quote  Post ReplyReply Direct Link To This Post Posted: 03 Jul 2009 at 07:47
Paper money in the form of dollar bills began in the US in the Civil War (both sides). There were various Supreme Court judgements on the question whether it was constitutional or not.
 
Paper money in the form of bank notes and letters of credit and promissory notes have been in use certainly since the later Middle Ages (or early Renaissance), and I have a feeling ît was in use in Roman times, though I can't be sure.
 
Wikipedia says paper money was in use in ancient China, and I have no reason to doubt that, but I think wikipedia is wrong dating the first paper mone in Europe to as late as the 16th century.
 
Contrary to what Resounding Eagle suggests, all the original Colonies and the Confederation issued banknotes. So leaving England to avoid papr money was kind of pointless.
 
Treasury notes (the equivalent in the UK to US dollar bills) were issued in WW1, but I suspect something similar was used earlier, though I'm not offhand sure.
 
Somewhere I've got Adam Smith's history of paper money, if I can find it. (not THAT Adam Smith; the other one :-) )
 
(It occurs to me that California's planned issuance of IOUs is an example of creation of paper money. One of the first things that will happen of course is that the market will set an exchange rate against the dollar.)


Edited by gcle2003 - 03 Jul 2009 at 07:50
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I think the first was Actually France or England. But more likely it was England when the US become a soverignity in1783,every state had issued its own currencv which would of been modeled after England.

The Knights of The Templar were the first to using chequing system with promissory notes for traveling from Inns and Lodges.

I don't think China before the European Intervention,the based their economic system mostly on batering.

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Post Options Post Options   Thanks (0) Thanks(0)   Quote Guests Quote  Post ReplyReply Direct Link To This Post Posted: 03 Jul 2009 at 08:36
Originally posted by AksumVanguard AksumVanguard wrote:

I don't think China before the European Intervention,the based their economic system mostly on batering.


Well, I can't vouch for anything earlier, but the Mongols (I believe it was during the reign of Kublai) issued paper currency in China.

-Akolouthos
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Praetor Quote  Post ReplyReply Direct Link To This Post Posted: 03 Jul 2009 at 21:31
Indeed Akoulothos paper money was first produced by the state in China during the earlier Song dynasty.

Regards, Praetor.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Styrbiorn Quote  Post ReplyReply Direct Link To This Post Posted: 03 Jul 2009 at 21:36
As far as I know the first paper money in Europe was issued by the Central Bank of Sweden in 1661, although they stopped their use after only 7 years, due to heavy inflation.

Edited by Styrbiorn - 03 Jul 2009 at 21:38
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Post Options Post Options   Thanks (0) Thanks(0)   Quote gcle2003 Quote  Post ReplyReply Direct Link To This Post Posted: 03 Jul 2009 at 21:36
The Oxford History of the Classical World (not overconcerned wiith econmic affairs) says that the Empire was a society with 'few' banking facilities, not none, and you can't have banking facilities at all without some kind of paper notes.
 
The younger Pliny complained about being unable at short notice to raise 3,000,000 sesterces to purchase another estate: it follows therefore that
(a) he thought he could, given more time
(b) it was possible in Rome to borrow money, preseumably in return for some kind of note
(c) it's unlikely that anyone expected him to hand over 75 tonnes of brass or even a sixth of a tonne of gold, or thereabouts.
 
As a separate point, the distinction between metallc coins and paper notes isn't terribly important economically, since anyway coins are always worth more than the metal in them (if it were otherwise they would either be melted down, or not circulated).
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Prince of Zeila Quote  Post ReplyReply Direct Link To This Post Posted: 04 Jul 2009 at 02:41
Originally posted by Praetor Praetor wrote:

Indeed Akoulothos paper money was first produced by the state in China during the earlier Song dynasty.

Regards, Praetor.
 
Song bank notes might have been updated versions of the ones used by earlier dynasties.
 
Yapese merchants must have welcomed this new form of currency, it's alot lighter than the old Rai stone coinsSmile 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Praetor Quote  Post ReplyReply Direct Link To This Post Posted: 04 Jul 2009 at 02:53
Originally posted by Prince of Zeila Prince of Zeila wrote:

Song bank notes might have been updated versions of the ones used by earlier dynasties.
 
Yapese merchants must have welcomed this new form of currency, it's alot lighter than the old Rai stone coinsSmile 


Thanks for the information, I should have put earliest confirmed bank notes then shouldn't IEmbarrassed
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Post Options Post Options   Thanks (0) Thanks(0)   Quote drgonzaga Quote  Post ReplyReply Direct Link To This Post Posted: 04 Jul 2009 at 04:19
Well, the distinction of what constitutes "paper money" in contrast to what is better defined as mercantile drafts [be they the fei'-ch'ien of T'ang China or the scripts against the Temple of Juno Monetas and personal or public notes of whatever type] is interesting. Much of what took place prior to the 17th century can not be considered paper currency in the strictest sense of the term. In that respect, Styrbiorn is correct for in 1656, the Bank of Sweden did receive a charter that authorized the printing of notes, the daler, first employed in 1661 (as distinct from English goldsmith certificates in use by 1633 patterned much like other paper common to guilds and merchants elsewhere in Europe in the years between 1400-1600). Paper bank notes expressed in pounds sterling followed thereafter in 1694 with the establishment of the Bank of England, and although during the American Revolution the various colonies did issue paper notes (premised on payment in Spanish milled "dollars"--the peso fuerte), the paper dollar makes its appearance with the establishment of the First Bank of the United States in 1791 and the US Mint Act of 1792.
 
Now we all do understand the historical accuracy of Chines paper money under the T'ang between AD 800 and 907 and the proliferation of the fei'-ch'ien in Chinese trade until the advent of the Ming, which discontinued the custom as a result of devaluation and hyperinflation (this last factor is not difficult to understand) but other mentioned examples from the 14th century [be it in Tabriz, India, or Japan] as with the Swedish experiment of 1661-1668 were short lived. A maxim that has to be considered: Paper notes are only as efficient a means of ensuring payment as the government serving as guarantor. Recall the fate of copper as a substitute for bullion. Not that current  metal speculators are not having a field day.
 
 
 
 


Edited by drgonzaga - 04 Jul 2009 at 04:21
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Post Options Post Options   Thanks (0) Thanks(0)   Quote gcle2003 Quote  Post ReplyReply Direct Link To This Post Posted: 04 Jul 2009 at 06:54
So?
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Post Options Post Options   Thanks (0) Thanks(0)   Quote drgonzaga Quote  Post ReplyReply Direct Link To This Post Posted: 04 Jul 2009 at 08:24
Originally posted by gcle2003 gcle2003 wrote:

So?
 
Think about it. Paper "currency", be it dollar, euro, or pound, entails the promised payment of what?
 
 


Edited by drgonzaga - 04 Jul 2009 at 08:25
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Post Options Post Options   Thanks (0) Thanks(0)   Quote gcle2003 Quote  Post ReplyReply Direct Link To This Post Posted: 04 Jul 2009 at 19:29

Depends on the currency. Could be anything really. Sometimes it has been gold, sometimes silver, in Germany at one time it was theoretically land. Most of the time nowadays it's simply more of the same paper currency.

Which is why the Treasury only guarantees to give you a dollar for a dollar, the ECB only guarantees a euro for a euro and so on.
 
What the government in most countries also usually guarantees is that the currency must be accepted by its citizens in payment of a debt. (That though is somewhat uncertain, as I recall, in the US.)
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Lance Armstrong Quote  Post ReplyReply Direct Link To This Post Posted: 22 Jul 2009 at 08:41

Originally posted by gcle2003 gcle2003 wrote:

So?

Paper money was first introduced in China, but the practice was discontinued due to inflations problems until the very late 19th century.

Modern paper money or paper money as we know it arose from later Western practice which also included further financial instruments such as a more or less functioning banking system, central banks, the scientific study of political economy, the use of the printing press etc. etc.

Does that answer you question?

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Post Options Post Options   Thanks (0) Thanks(0)   Quote gcle2003 Quote  Post ReplyReply Direct Link To This Post Posted: 22 Jul 2009 at 20:53

Not really, though what you say is correct enough. I accept my question was somewhat elliptic Smile

What I meant was more like '...and what conclusions can we draw from that?'
 
For instance, how does paper money differ from any other kind of money? Does it in any significant way, apart from being printed on paper? What difference does that make?
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Post Options Post Options   Thanks (0) Thanks(0)   Quote egyptian goddess Quote  Post ReplyReply Direct Link To This Post Posted: 23 Jul 2009 at 17:38
Well this may be irrelevant, but in Australia our "paper" money isn't paper at all its almost like plastic... I guess it preserves the life of the tangible note. Is anyone else aware of another country who uses plastic paper money?
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Omar al Hashim Quote  Post ReplyReply Direct Link To This Post Posted: 23 Jul 2009 at 18:29
Originally posted by drgonzaga drgonzaga wrote:

but other mentioned examples from the 14th century [be it in Tabriz, India, or Japan]
Continuing the play on semantics in the previous couple of posts, the 14th century Delhi Sultanate didn't introduce paper money, but token money. Copper coins that represented Gold coins. The experiment failed, as everyone took their copper coins and demanded gold from the treasury.
 
Its kind of philosophical but possibly important to consider what a currency actually is. Why was a copper token less valuable than Gold? For that matter I love the trade between the Egyptians and the Sahel, Cowries - the currency of the Sahel, for Gold - the currency of Egypt. Its a win-win trade of two pretty much practically useless things. A soft metal for a sea shell.
Is there any actual real difference between Gold and Paper money?
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Post Options Post Options   Thanks (0) Thanks(0)   Quote erkut Quote  Post ReplyReply Direct Link To This Post Posted: 23 Jul 2009 at 19:32
By the way i also heard that paper money is not actually paper but cotton. İs that true? Ermm
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Post Options Post Options   Thanks (0) Thanks(0)   Quote gcle2003 Quote  Post ReplyReply Direct Link To This Post Posted: 23 Jul 2009 at 22:22
There are a couple of things about gold: it's pretty well indestructible, and it's èretty, period., qualities it shares with platinum and silver and other 'noble' metals. So if you've got an ounce of gold tucked away now, you can be pretty sure that you'll have an ounce of gold ten years from now, unless someone steals it of course, or you lend it to Bernie Madoff or something. Whereas paper (whatever it's made of) may get burnt or shredded and cowrie shells may break.
 
What it will be 'worth' ten years from now is a different question and raises the issue of what one means by 'worth' anyway. How many hamburgers it will buy? How many TV sets? How many coronary bypasses?
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Ziegenbartami Quote  Post ReplyReply Direct Link To This Post Posted: 07 Dec 2009 at 09:06
Originally posted by gcle2003 gcle2003 wrote:

There are a couple of things about gold: it's pretty well indestructible, and it's èretty, period., qualities it shares with platinum and silver and other 'noble' metals. So if you've got an ounce of gold tucked away now, you can be pretty sure that you'll have an ounce of gold ten years from now, unless someone steals it of course, or you lend it to Bernie Madoff or something. Whereas paper (whatever it's made of) may get burnt or shredded and cowrie shells may break.
 

Not to mention it'll retain its value over the years, unlike paper currency. A unit of gold will buy you a fixed number/amount of goods or services. 50 years later, that same amount of gold will buy you the same number/amount of goods/services, whereas paper currency is easily devalued, and will buy you fewer goods/services after the same period of time.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote gcle2003 Quote  Post ReplyReply Direct Link To This Post Posted: 08 Dec 2009 at 04:07
That's not true. The value of gold, like any other commodity, varies with suppply and demand, including artificial constraints on supply. So it's value in terms of other commodities dropped significantly in 16th century Europe (while going up in 16th century south America: I don't know what was happening in the east), More recently it declined steadily in the firties and sixties, shot up in the seventies, and has wandered up and down ever since. Any time South Africa feels like it, the value of gold could be pushed down by dumping, but of course the regime is unlikely to do that, just as Saudi Arabia is unlikely to start dumping oil.
 
And if Indians stop socking away all they can get hold of, who knows what would follow.
 
Actually diamonds keep their commodity value better than gold does, but that's mostly because supply is artificially and tightly controlled to just that end. And there's a lot of truth in the old saying that land is best, because they aren't making it any more.
 
PS in the early forties an ounce of gold bought you about 700 bottles of Coca Cola (retail): at the end of the 60s it bought about 350. Now it'll buy more like 4,000 but that also reflects the fact that the value of a coke against other things has dropped dramatically.
 
Basically though, nothing's safe.
 
 


Edited by gcle2003 - 08 Dec 2009 at 04:09
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Ziegenbartami Quote  Post ReplyReply Direct Link To This Post Posted: 04 Feb 2010 at 11:44
Originally posted by erkut erkut wrote:

By the way i also heard that paper money is not actually paper but cotton. İs that true? Ermm

Yes, it's a blend of cotton and linen, which is much more durable than mere paper.
http://shine.yahoo.com/channel/life/15-things-you-never-noticed-on-a-dollar-575113/?pg=1
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Ziegenbartami Quote  Post ReplyReply Direct Link To This Post Posted: 04 Feb 2010 at 11:47
For those wondering why gold has long been considered a medium of exchange (ie, money), I'd highly suggest reading the first chapter of The Mystery of Banking by Murray Rothbard.
http://mises.org/Books/mysteryofbanking.pdf
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Post Options Post Options   Thanks (0) Thanks(0)   Quote gcle2003 Quote  Post ReplyReply Direct Link To This Post Posted: 04 Feb 2010 at 21:27
I don't think anyone on earth would deny that gold has not only long been considered a medium of exchange, but has indeed been a medium of exchange for long periods in much of the world.
 
What's wrong is the belief that there is something unique about gold that means it should have specific status. It is no more reliable as a store of value that any other product - as the Coke example I gave indicates.
 
As a collection of fables and fairy tales of the 'lies-to-children'[1] kind, the chapter does indeed marshal all the arguments for the unique desirability of gold, but it fails to consider the counter arguments , and gets away with totally invalid assertions like the reference to von Mises 'money always emerges from free market activity', which has about as much validity as Say's Law.
 
Apart from anything else the passage contains the seeds of its own destruction in its admission that money is created by banks. That's correct. But banks don't create gold. So gold isn't money and money isn't gold.
 
[1] 'Lies-to-children' - phrase invented by Ian Stewart and Jack Cohen for the answers you give to children when the real answers are too difficult for them at that stage.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Ziegenbartami Quote  Post ReplyReply Direct Link To This Post Posted: 05 Feb 2010 at 13:44
Originally posted by gcle2003 gcle2003 wrote:

I don't think anyone on earth would deny that gold has not only long been considered a medium of exchange, but has indeed been a medium of exchange for long periods in much of the world.
 
It is no more reliable as a store of value that any other product - as the Coke example I gave indicates.

If it's so unreliable, then name another product that is more stable in price. Your Coke example alone indicates hardly anything, other than the value of Coke--it could just as easily reflect changes in the price due to different methods of production or shipping, or the overall decline in the value of the dollar as it was devalued by the US government to pay for the Vietnam War, ending in the complete abandonment of the gold standard in 1971.
 
Originally posted by gcle2003 gcle2003 wrote:

As a collection of fables and fairy tales of the 'lies-to-children'[1] kind, the chapter does indeed marshal all the arguments for the unique desirability of gold, but it fails to consider the counter arguments, and gets away with totally invalid assertions like the reference to von Mises 'money always emerges from free market activity', which has about as much validity as Say's Law.

What counter-arguments? And how is Say's Law or von Mises' claim that money emerges from free market activity invalid?

Originally posted by gcle2003 gcle2003 wrote:

Apart from anything else the passage contains the seeds of its own destruction in its admission that money is created by banks. That's correct. But banks don't create gold. So gold isn't money and money isn't gold.

You've missed the point of Rothbard's argument. He "admits" that money is created by banks only insofar as he acknowledges the current practice of fractional reserve banking, which he opposes. No, banks do not create gold, but for paper money to have any intrinsic value, it has to be backed by a substance with intrinsic value of its own, such as gold. Money is nothing other than a medium of exchange, and for centuries gold and silver were such mediums for their high value-to-mass ratio. All the banks did was to issue a lighter, more easily transportable form of money in the form of paper, which is nothing more than receipts entitling the bearer to the amount of gold or silver specified on the receipt upon demand. In other words, paper money is nothing more than a gold substitute, and the money supply can only be expanded by expanding the reserves of bullion or devaluing the currency (the latter of which being the case for many decades and likely to continue in the foreseeable future).
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Post Options Post Options   Thanks (0) Thanks(0)   Quote gcle2003 Quote  Post ReplyReply Direct Link To This Post Posted: 05 Feb 2010 at 22:02
Originally posted by Ziegenbartami Ziegenbartami wrote:

Originally posted by gcle2003 gcle2003 wrote:

I don't think anyone on earth would deny that gold has not only long been considered a medium of exchange, but has indeed been a medium of exchange for long periods in much of the world.
 
It is no more reliable as a store of value that any other product - as the Coke example I gave indicates.

If it's so unreliable, then name another product that is more stable in price.
There isn't one. That's rather my point. However, I already suggested diamonds. Or platinum. Whenever one product varies in value compared to another, it's totally arbitrary which is seen as the yardstick and which as the variable. In fact both are variables.
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Your Coke example alone indicates hardly anything, other than the value of Coke--it could just as easily reflect changes in the price due to different methods of production or shipping, or the overall decline in the value of the dollar as it was devalued by the US government to pay for the Vietnam War, ending in the complete abandonment of the gold standard in 1971.
Prices shift for one reason or another, usually because their relative scarcity changes. The point of the Coke example is that it exemplifies how Coke can be priced in gold, or gold priced in Coke. What remains constant is that an ounce of gold is always an ounce of gold, and a bottle of Coke is always a bottle of Coke.
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Originally posted by gcle2003 gcle2003 wrote:

As a collection of fables and fairy tales of the 'lies-to-children'[1] kind, the chapter does indeed marshal all the arguments for the unique desirability of gold, but it fails to consider the counter arguments, and gets away with totally invalid assertions like the reference to von Mises 'money always emerges from free market activity', which has about as much validity as Say's Law.

What counter-arguments? And how is Say's Law or von Mises' claim that money emerges from free market activity invalid?
As for von Mises, his claim is that money always emerges from free market activity. It's the 'always' that is wrong.
Money is created by banks, including the central bank if there is one officially, or by some other government branch, notably any branch responsible for minting coins or issuing treasury notes. Coins and notes are given value by edict of the government, which decrees them to be legal tender. (This is just as true in the US as anywhere else - cf Section 8 Article 1 of the Constitution.)
 
Other forms of money can generally be represented as promises to pay notes and coin, though the promises are formal and cannot all be met.
 
As for Say, the law doesn't work because it overlooks that some members of society may be cut completely out of the economic process through unemployment (for whatever reason). It is therefore not true that there is always enough monetary supply to balance the supply of goods. Soif there isn't enough monetary demand, supply of goods goes down, increasing unemployment and driving monetary demand down even more. Optimum employment is therefore not guarateed, contrary to Say.
 
The economic record demolishes Say anyway. Persisting sub-optimum employment at equilibrium is a relatively common phenomenon.
 
As for the counter argumnts, the inelasticity of gold supply is one, guaranteeing that money supply cannot increase to keep pace with, and fund, economic growth. No country has been able successfully to stay on the gold standard for long, at least without frequent intermittent depressions. Attempts to do so for too long have been ruinous, as with Britain's return to the gold standard in the 'twenties.
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Originally posted by gcle2003 gcle2003 wrote:

Apart from anything else the passage contains the seeds of its own destruction in its admission that money is created by banks. That's correct. But banks don't create gold. So gold isn't money and money isn't gold.

You've missed the point of Rothbard's argument. He "admits" that money is created by banks only insofar as he acknowledges the current practice of fractional reserve banking, which he opposes. No, banks do not create gold, but for paper money to have any intrinsic value, it has to be backed by a substance with intrinsic value of its own, such as gold.
No it doesn't, and for that matter gold has no intrinsic value of its own, or at least not much. In fact one of the things about gold is that it has much less intrinsic value than stuff like oil, housing, land, cattle, transistors ... or anything else that actually contributes something to the quality or length of life.
 
I don't know what you mean by the 'current practice' of fractional reserve banking. It's as old as banks. Moreover abolishing fractional reserve banking wouldn't get rid of the problem anyway. Say customer X deposits $1000 with the bank (in gold or whatever). The bank then lends $50 to customer Y. That's not 'fractional' reserve banking, but it remains true that if customer X should want his money he can't have it: or the bank has to claw it back from Y, which won't be possible if the term of the loan isn't up.
 
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 Money is nothing other than a medium of exchange, and for centuries gold and silver were such mediums for their high value-to-mass ratio. All the banks did was to issue a lighter, more easily transportable form of money in the form of paper, which is nothing more than receipts entitling the bearer to the amount of gold or silver specified on the receipt upon demand. In other words, paper money is nothing more than a gold substitute, and the money supply can only be expanded by expanding the reserves of bullion or devaluing the currency (the latter of which being the case for many decades and likely to continue in the foreseeable future).
A fundamental problem there, as I already pointed out, is that you cannot just expand the reserves of bullion. Not even if you are South Africa or Russia. All you can do with gold is increase its price in dollars or what you will - which is what you of course refer to as devaluing the currency, but is actually revaluing gold, and which happened under FDR and Nixon before it was finally freed.
 
Not only can you not expand gold reserves, you also cannot prevent gold reserves leaking away, so you're left with a dilemma if you insist that money must be gold backed and you don't have any gold to back it with.
 
Paper money has value because the holder of it believes he will be able to spend it usefully. Credit cards - another manifestation of money - similarly have value because the person accepting them expects to be paid in turn with paper money. Except of course that nowadays he doesn't even expect that: he expects a few integrated circuits around the world to click and switch and end up in his bank's computer indicating that he is worth more 'money' now than the was before.
 
It is of of course a big bubble dependent omn faith in the system to keep it going, but then it ever was, even when kings borrowed gold coins from Lombard bankers.
 
Have you ever stopped to think why every country came off the gold standard?


Edited by gcle2003 - 05 Feb 2010 at 22:10
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Post Options Post Options   Thanks (0) Thanks(0)   Quote drgonzaga Quote  Post ReplyReply Direct Link To This Post Posted: 06 Feb 2010 at 03:04
Paper money, just as with religion, is a function of strength in faith! Hedging with gold as an insulator against inflation is totally illusory.
 
And gcle is right! Having even paper money in one's pocket is a sign of the untrustworthy.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Guests Quote  Post ReplyReply Direct Link To This Post Posted: 24 Jun 2012 at 02:45
This is ironic, in Tang-Qing Dynasty China, the paper money was allowed to be written upon by certified calligraphers who had studied the manditory 20 years under a true master of the art. There are examples of this when paper was only printed on one side, if a calligrapher was out of paper, they would write on it. Isn't that strange? Although, I have considered that on my "Republic of China" 1912-1948 currency. I have way too much of it and the paper money is worth less than the paper it's printed on!!
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Cywr Quote  Post ReplyReply Direct Link To This Post Posted: 24 Jun 2012 at 03:38
Quote By the way I also heard that paper money is not actually paper but cotton. İs that true? Ermm


Paper is made from the pulp of various plant fibres, wood, grasses and reeds, and sometimes even from scraps of plant fibre based fabric. So yes, cotton, hemp, and any form of common plant fibre can be used.
As it happens cotton fibre is a popular choice for paper money, as it is quite durable and doesn't fade or discolour easily. Its also used in legal paper and other important documents.


Edited by Cywr - 24 Jun 2012 at 03:39
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