The History of Money $

How did money come to be?Using terms and events very loosely.More like the History of Money (sort of)

The History of Money $Economic OrigamiFold paper in HamburgerFold Paper in HamburgerFold Paper in HamburgerUse to write down notes (flowchart/timeline style)Use notes to write a short sort of history of moneyLook things up on internet to get help/ideasIllustrated Comic Book like itemSpecs to follow in a day or so

State of Nature Prehistoric Period

What was life like before written history? How did people live? What does state of nature really mean? Good Questions: Listen to Meder and write something down regarding it here.No Rules: No right or wrong= State of NatureLife very dangerous:Caveman makes first trade You protect me QPQ and I protect youTrade makes people better off.

12,000-9,000 BC Barter System

Dual Coincidence of Wants very inefficient. I must want what you have at the same time you want what I have in trade. Divisions of Labor develop

Problem: Value Problem: PerishabilityProblem: DivisibilityProblem: PortabilityProblem: Equality

@1500 BC China: Representative Money QPQ (Quid Pro Quo)

Seashells used to help equate the value and equality of one good for another. Made trade easier and more efficient Began to solve the dual coincidence of wants issue.Began to solve the value and divisibility issues too

Created counterfeitersBandits came (developed)Police needed

@ 900 BC: Cities Develop Trade CentersDeposit Goods for later sales

Keep records of who brought and traded what with whom

Stored excess goods for later availability

Roots of Banking System (Deposits and Debts)

Benefits limited to that City/Market

@500 BC Commodity Money Has intrinsic value (value in and of itself)Limited quantityScarce not just lying aroundLivestock, metals, grains, salt, etc.Creates need for police (military) Highwaymen (land pirates)

@900 AD Checkable DepositsTrade-Centers developed record keeping of tradesFirst form of paper money (checks)Check (value based upon previous deposit like meat)

Not Uniformly acceptable (where is deposit) store creditLimited to a specific place or by reputation good v bad

@1400-1930 AD Gold StandardDeveloped around the Renaissance

Travel much easier due to developed roads

Effort to stabilize currency around the world Trade

Imperialism: seeking to gain by conquering others

Measure everything against Gold

The Development of Consumer CreditSears & Roebuck Company Catalog 1888The Amazon.com of its dayStabilized prices for farmers of U.S.Established revolving Credit Durable goods first (Washers, Dryers etc.)Pay premium plus interest, take back and resell if delinquentSpawned Consumer credit