Money. We work for it. We buy things with it. We need it for retirement. But what is it, anyway? And what gives our money value?
Money originally took the form of a commodity such as gold or silver (or grain, in the earliest cases), and as such, it had a recognized market value.
After the introduction of banknotes and coins that lacked intrinsic value (ie, weren’t worth their weight in gold), money became representative of value rather than actually holding that value itself. This ‘representative money’ acted like a certificate to show that a certain amount of gold or silver was stored at the central bank, or treasury, in the way that notes for one pound sterling could be exchanged for one troy pound of sterling silver. In effect it was a promise by the government, or the bank on the government’s behalf, to hand over that amount of bullion.
Since 1971, the U.S. dollar has been convertible into absolutely nothing.
Since Nixon's ruling, the United States has operated on a system of fiat money, which means our currency is not tied to any other commodity. The word "fiat" originates in the Latin, the imperative of the verb facere, "to make or become." Fiat money is money whose value is not inherent but called into being by a human system. So these pieces of paper in your pocket are just that: pieces of paper.
Why then do people still work for money? The answer is legal tender laws. If you look at one of your dollars, you will notice it says, “This note is legal tender for all debts, public and private.” This means that people and business have to accept U.S. dollars — by law — for any debts. And of course, the U.S. government has to accept them for taxes
Modern economics no longer hangs on gold and is fairly complex.
The more a country exports (or the more valuable the exports) the more its money is valued in the global community.
The more it...Read More
from Keywebco http://bit.ly/31W5C3J
via IFTTT
Money. We work for it. We buy things with it. We need it for retirement. But what is it, anyway? And what gives our money value?
Money originally took the form of a commodity such as gold or silver (or grain, in the earliest cases), and as such, it had a recognized market value.
After the introduction of banknotes and coins that lacked intrinsic value (ie, weren’t worth their weight in gold), money became representative of value rather than actually holding that value itself. This ‘representative money’ acted like a certificate to show that a certain amount of gold or silver was stored at the central bank, or treasury, in the way that notes for one pound sterling could be exchanged for one troy pound of sterling silver. In effect it was a promise by the government, or the bank on the government’s behalf, to hand over that amount of bullion.
Since 1971, the U.S. dollar has been convertible into absolutely nothing.
Since Nixon's ruling, the United States has operated on a system of fiat money, which means our currency is not tied to any other commodity. The word "fiat" originates in the Latin, the imperative of the verb facere, "to make or become." Fiat money is money whose value is not inherent but called into being by a human system. So these pieces of paper in your pocket are just that: pieces of paper.
Why then do people still work for money? The answer is legal tender laws. If you look at one of your dollars, you will notice it says, “This note is legal tender for all debts, public and private.” This means that people and business have to accept U.S. dollars — by law — for any debts. And of course, the U.S. government has to accept them for taxes
Modern economics no longer hangs on gold and is fairly complex.
The more a country exports (or the more valuable the exports) the more its money is valued in the global community.
The more it...Read More http://bit.ly/2hpXsOc
No comments:
Post a Comment