Paper currency

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Joined: Mon 28. Feb 2011, 11:17
PostPosted: Mon 23. May 2011, 19:06
Paper currency

Money is like the wheel was invented, without which modern civilization would be inconceivable. Of the civilizations known to us only the Incas seem to have gotten along without money.
If the money had not been invented, it would have to be invented. The paper money has a big advantage of gold coins and the opposite: it is lighter and easier to transport.
China is the first country in the world, used in the paper money was (960-1127 in the Song Dynasty) was. Around 1024 used paper money as emergency money to finance a war, when coins were in short supply. In Europe paper money was introduced in 1483 in Spain, but at the time as a temporary replacement for missing coins. 1661 had been issued by the Bank of Stockholm in Sweden, the first official banknotes in Europe.
In the 16-17. Century coins banks took a receipt in safe custody. The receipts were used as currency. These receipts were called banknotes. In times of need also took stamps and the function of pieces of leather notes.
A bank note is usually a rectangular, double-sided printed piece of paper that is after the currency of the respective state law is a legitimate bank has been published and is a round sum of currency units. Notes represent a value based on the confidence in the Fed issued or maintenance of the payment function of the note. Bills are referred by their nature paper money. In addition to paper money includes coins to cash.
The teller of the current Eurosystem is not subject to any rules on coverage. The European Central Bank ECB used, among other claims to banks for cover. If banks get money from the ECB, these demands and eligible securities. These securities include debt from public hands. The central bank is no obligation to exchange the banknotes issued by it on demand in a fixed quantity of gold or silver. Because paper money can be made without high costs, it is possible in connection with the monopoly of money creation and the Declaration of paper money as legal tender, take it to abound on the market. The monopoly of money creation is the central banks, such as the the ECB and the U.S. Fed are in private hands. This leads to price increases and a loss of purchasing power of money. As has often been muted by government debt paper money in circulation to finance wars and this was associated almost always with inflation, paper money was often with suspicion on the part of the population covered.

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