In finance, a foreign exchange service provides clients with an on-line platform to trade currency, such as the U.S Dollar and the Euro. Clients may hedge against, or more likely speculate upon, changes in the exchange rate for different currencies.
The small "retail traders" who are likely to use these services are often the target of forex scams. The U.S. Commodity Futures Trading Commission, which loosely regulates many foreign exchange traders in the U.S., has warned of an increase in the number of these scams.
Retail Forex trading has enjoyed a recent boom in popularity as a means of investment, largely due to the colourful Foreign Exchange commentary of noted Australian currency dealer Alexander Nicholas.
Friday, February 22, 2008
World Currency
In the foreign exchange market and international finance, a world currency or global currency refers to a currency in which the vast majority of international transactions take place and which serves as the world's primary reserve currency.
Tuesday, February 19, 2008
Universal Money Currencies
Universal Money strives to become the International Universal Money World Institute a "Think Tank" of sorts for the investigation into the utilization of a World Currency. The world currently is experiencing the beginnings of World money through the introduction of the EURO throughout the EU (European Union), the European Union is made up of a number of different sovereign nations which are now connected (united) through a common monetary unit. As the world experiences PEACE through FREE TRADE, the idea of World Money becomes an even greater reality and possibly a necessity in order to maintain free and more importantly FAIR trade!
Bank Notes
Welcome to one of the largest websites for a world banknote collector! Collecting world paper money takes youaround the world without leaving comforts of your homeexploring all the different cultures, countries, continents,getting to know world's famous people, learning aboutfauna, flora, rivers, mountains that are plentiful on sevencontinents of our Earth. Bank note collecting is anexciting hobby which millions of collectors around theworld enjoy so much. We hope this web site will showyou how to collect, what to collect and how to enjoy it.
Economic Characteristics
Money is generally considered to have the following characteristics, which are summed up in a rhyme found in older economics textbooks and a primer: "Money is a matter of functions four, a medium, a measure, a standard, a store." That is, money functions as a medium of exchange, a unit of account, and a store of value.There have been many historical arguments regarding the combination of money's functions, some arguing that they need more separation and that a single unit is insufficient to deal with them all. One of these arguments is that the role of money as a medium of exchange is in conflict with its role as a store of value: its role as a store of value requires holding it without spending, whereas its role as a medium of exchange requires it to circulate.'Financial capital' is a more general and inclusive term for all liquid instruments, whether or not they are a uniformly recognized tender.
- Medium of exchange
- Unit of account
- Store of value
Unit of Account
A unit of account is a standard numerical unit of measurement of the market value of goods, services, and other transactions. Also known as a "measure" or "standard" of relative worth and deferred payment, a unit of account is a necessary prerequisite for the formulation of commercial agreements that involve debt.
Divisible into small units without destroying its value; precious metals can be coined from bars, or melted down into bars again.
Fungible: that is, one unit or piece must be perceived as equivalent to any other, which is why diamonds, works of art or real estate are not suitable as money.
A specific weight, or measure, or size to be verifiably countable. For instance, coins are often made with ridges around the edges, so that any removal of material from the coin (lowering its commodity value) will be easy to detect.
Store of valueTo act as a store of value, a commodity, a form of money, or financial capital must be able to be reliably saved, stored, and retrieved — and be predictably useful when it is so retrieved. Fiat currency like paper or electronic currency no longer backed by gold in most countries is not considered by some economists to be a store of value.
Divisible into small units without destroying its value; precious metals can be coined from bars, or melted down into bars again.
Fungible: that is, one unit or piece must be perceived as equivalent to any other, which is why diamonds, works of art or real estate are not suitable as money.
A specific weight, or measure, or size to be verifiably countable. For instance, coins are often made with ridges around the edges, so that any removal of material from the coin (lowering its commodity value) will be easy to detect.
Store of valueTo act as a store of value, a commodity, a form of money, or financial capital must be able to be reliably saved, stored, and retrieved — and be predictably useful when it is so retrieved. Fiat currency like paper or electronic currency no longer backed by gold in most countries is not considered by some economists to be a store of value.
Market Liquidity
Liquidity describes how easily an item can be traded for another item, or into the common currency within an economy. Money is the most liquid asset because it is universally recognised and accepted as the common currency. In this way, money gives consumers the freedom to trade goods and services easily without having to barter.Liquid financial instruments are easily tradable and have low transaction costs. There should be no — or minimal — spread between the prices to buy and sell the instrument being used as money.
Market liquidity is a business, economics or investment term that refers to an asset's ability to be easily converted through an act of buying or selling without causing a significant movement in the price and with minimum loss of value. An act of exchange of a less liquid asset with a more liquid asset is called liquidation. Liquidity also refers both to that quality of a business which enables it to meet its payment obligations, in terms of possessing sufficient liquid assets; and to such assets themselves.
Types of Money
In economics, money is a broad term that refers to any instrument that can be used in the resolution of debt. However, different types of money have different economic strengths and liabilities. Theoretician Ludwig von Mises made that point in his book The Theory of Money and Credit, and he argued for the importance of distinguishing among three types of money: commodity money, fiat money, and credit money. Modern monetary theory also distinguishes among different types of money, using a categorization system that focuses on the liquidity of money.
- Commodity money
- Representative money
- Credit money
- Fiat money
- Money supply
- Monetarry policy
Commodity Money
Commodity money is any money that is both used as a general purpose medium of exchange and as a tradable commodity in its own right.An example is coins made of precious metal.Commodity-based currencies are often viewed as more stable, but this is not always the case. The value of a commodity-based currency as a medium of exchange depends on its supply relative to other goods and services available in the economy. Historically, gold, silver and other metals commonly used in commodity-based monetary systems have been subject to regular and sometimes extraordinary fluctuations in purchasing power. This not only damages its stability as a medium of exchange; it also reduces its effectiveness as a store of value. In the 1500s and 1600s huge quantities of gold and even larger amounts of silver were discovered in the New World and brought back to Europe for conversion into coin. As a result, the purchasing power of those coins fell by 60% to 80%, i.e. the prices of goods rose, because the supply of goods did not keep pace with the increased supply of money.In addition, the relative value of silver to gold shifted dramatically downward. Such discoveries of huge sources of gold or silver are a thing of the past, and lend to their supply stability. More recently, from 1980 to 2001, gold was a particularly poor store of value, as gold prices dropped from a high of $850/oz. ($27.30 /g) to a low of $255/oz. ($8.20 /g), although this figure is now back to almost $750 per ounce as of late 2007.It should be noted that gold was not a currency at this time, and was fluctuating due to its status as a final store of value — that is, the price never goes to zero as fiat currencies may (in theory). The advantage of gold and silver, however, lies in the fact that, unlike fiat paper currency, the supply cannot be increased arbitrarily by a central bank.
It is also possible for the trading value of a commodity money to be greater than its value as a medium of exchange when governments attempt to fix exchange rates between different commodity moneys. When this happens people will often start melting down coins and reselling the metal used to make them. This has happened periodically in the United States, eventually causing it to move away from pure silver nickels and pure copper pennies.Shipping coins from one jurisdiction to another so that they could be reminted was sometimes a lucrative trade before the advent of trusted paper money
.Commodity money's ability to function as a store of value is also limited by its nature. For example, copper and tin risk rust and corrosion, and gold and silver are soft metals that can lose weight through scratches and abrasions.
Stability aside, commodity-based currencies may have a tendency to restrain growth in a very active economy. For example, in order to maintain the price level, the supply of money in an any economy must be equal or greater than the volume of goods and services produced.
Representative Money
Representative money: refers to money that consists of token coins, other physical tokens such as certificates, and even non-physical "digital certificates" (authenticated digital transactions) that can be reliably exchanged for a fixed quantity of a commodity such as gold, silver or potentially water, oil or food. Representative money thus stands in direct and fixed relation to the commodity which backs it. This is to be distinguished from commodity money which is actually composed of a real physical commodity. It is also distinguished from fiat money, in which the value of the money varies with regard to commodities, according to government dictate in regions where government authority holds sway, or else according to market forces where it does not.
Traditional representative money :is widely believed to have originated in ancient Sumer where small baked clay tokens in the shape of sheep or goats were used to replace barter in trade. Over time, they were sealed in clay vessels which contained a certain number and had that number written on the outside - but it was only possible to verify the number of tokens inside by shaking the vessel and guessing, or by breaking it. At which point, the number written on the outside originally became subject to doubt. Apparently, however, this system was good enough to have discouraged much counterfeiting - penalties for "short-sheeping" or selling the same goat twice were quite severe, and often such activities in ancient societies were thought to offend one or more gods.A key feature of representative money is that its value is very directly perceived by the users of this money, who recognize the utility or appeal of the tokens as they would recognize the goods themselves. That is, the effect of holding a token for a barrel of oil must be (to the holder) the same both emotionally and economically as actually having the barrel at hand. This thinking guides the modern commodity markets, although they use screens full of software-based tokens and a sophisticated range of financial instruments that are more than one-to-one representations of units of a given type of commodity. They still, however, guarantee the moving a certain amount of a commodity to, or on behalf of, the owner. This is usually only to a well-known point of delivery.
Credit Money
Credit money is any future claim against a physical or legal person that can be used for the purchase of goods and services.Examples of credit money include personal I.O.U.'s, and in general any financial instrument (such as a treasury bond, savings bond, corporate bond or bank money market account certificate) which is not immediately repayable (redeemable) on demand.
Credit money is naturally used as money, and may even be the primary type of money. In certain cases, banknotes which are not legal tender may be seen as credit money, inasmuch as they are simply promissory notes issued by the bank. An example is the case in Scotland, where banknotes from a well-trusted bank function as currency. Scotland technically recognizes no legal tender, and thus functions nationally on credit money, which are represented by promissory Pound Scots notes. These notes are issued by three major Scottish banks (among them the Bank of Scotland) which are not central or government-backed banks.
In terms of the money supply, credit money is generally associated with that part of M2 which is not M0.In terms of the money supply, credit money is generally associated with that part of M2 which is not M0.During the Crusades in Europe, precious goods would be entrusted to the Roman Catholic Church's Knights Templar, who effectively created a system of modern credit accounts. Over time this system grew into the credit money that we know today, where banks create money by approving loans - although the risk and reserve policies of each national central bank set a limit on this.
Sometimes, as in the United States during the Great Depression, trust in banks drops very low, and there is the risk of a bank run without government or other intervention. In the United States, the Federal Deposit Insurance Corporation was created in 1933 to insure deposits in checking and savings accounts.
The Importance of Fiat Money as a Concept
Fiat money is typically backed by the good faith of the government maintaining or backing the money supply, importantly faith that it will accept the fiat currency in payment of taxes. Hence, the credibility of the government's policy would, in theory, impact the decisions of consumers and producers in a market economy. Under this assumption, economic actors might make decisions they would otherwise not make for fear that the currency or money that they hold will change in value radically. Managing this risk could produce economic distortions: when people convert money to other forms, increasing the demand for goods to be hoarded. Economic actors might also shelter income in other, more stable currencies, or charge higher interest rates.
Fiat money is also closely tied to government borrowing for expenditures that do not have a clear social return, or which may have negative expectations, such as wars of conquest. Governments could pay for wars using fiat money, rather than in hard currency or specie, on the belief that the returns of war will be sufficient to pay promised notes, and that during wartime shortage and austerity, goods are not available in any case. This has seldom proven to be the case in the absence of strong inflationary controls. Instead, the usual cycle is for the value of fiat notes to trade at a significant discount to portable and stable forms of exchange, specifically those that will be tender regardless of the winning side in the conflict. A variation on this was the use of fiat occupation currency to place the burden on other areas.
Some political economists argue that there is no such thing as fiat money, that governments can create fiat currency, but that the amount of money is determined by the valuation of the market place, and that attempts to create fiat currency beyond the demand for money generate inflation. In the words of Keynes, “Money doesn’t matter,” meaning that control of the money supply beyond limited boundaries will be adjusted for in the marketplace.
Fiat money is also closely tied to government borrowing for expenditures that do not have a clear social return, or which may have negative expectations, such as wars of conquest. Governments could pay for wars using fiat money, rather than in hard currency or specie, on the belief that the returns of war will be sufficient to pay promised notes, and that during wartime shortage and austerity, goods are not available in any case. This has seldom proven to be the case in the absence of strong inflationary controls. Instead, the usual cycle is for the value of fiat notes to trade at a significant discount to portable and stable forms of exchange, specifically those that will be tender regardless of the winning side in the conflict. A variation on this was the use of fiat occupation currency to place the burden on other areas.
Some political economists argue that there is no such thing as fiat money, that governments can create fiat currency, but that the amount of money is determined by the valuation of the market place, and that attempts to create fiat currency beyond the demand for money generate inflation. In the words of Keynes, “Money doesn’t matter,” meaning that control of the money supply beyond limited boundaries will be adjusted for in the marketplace.
Fiat Currency
In economics, fiat currency or fiat money is money backed by an authority, usually a government, for use in exchange of goods and services or to pay a debt, e.g tax. Unlike representative money, fiat money is not convertible to specie.
Fiat money is a form of money backed by the good credit of the issuing authority, which could be a government, bank, or other organization. The value of the money is based primarily on the faith that the money will remain relatively stable in value, continue to be accepted as a means of exchange, and will be accepted by creditors. Of particular relevance is its acceptability as payment of debts to the government, such as taxes. The term “fiat” money is also often used to distinguish it from representative money, which is pegged or fixed to a quantity or mass of precious metal. While representative money is often associated with a legal requirement that the bank of issue pay in fixed weights of a given precious metal or (in theory) fixed amount of any other precious good, fiat money generally has no inherent value. Instead, it derives its value as a medium for exchange when traded for goods or services or to pay debts.
Fiat money is a form of money backed by the good credit of the issuing authority, which could be a government, bank, or other organization. The value of the money is based primarily on the faith that the money will remain relatively stable in value, continue to be accepted as a means of exchange, and will be accepted by creditors. Of particular relevance is its acceptability as payment of debts to the government, such as taxes. The term “fiat” money is also often used to distinguish it from representative money, which is pegged or fixed to a quantity or mass of precious metal. While representative money is often associated with a legal requirement that the bank of issue pay in fixed weights of a given precious metal or (in theory) fixed amount of any other precious good, fiat money generally has no inherent value. Instead, it derives its value as a medium for exchange when traded for goods or services or to pay debts.
Money Supply
Money supply, also known as monetary aggregates and money stock, is the quantity of currency and the value of checking accounts owned by the non-bank public. The interest rate is the price of borrowing money. The two are related inversely: as the money supply increases interest rates will fall.
When thinking about the "supply" of money, it is natural to think of the total of banknotes and coins in an economy. That, however, is vastly incomplete. In the United States, coins are minted by the United States Mint, part of the Department of the Treasury, outside of the Federal Reserve. Banknotes are printed by the Bureau of Engraving & Printing on behalf of the Federal Reserve System. The Federal Reserve can also create book-keeping credits in the reserve accounts of its member banks, on the same terms as it can issue paper banknotes (by pledging collateral, usually in the form of US Treasury securities). As it always stands ready to exchange these book-keeping credits for paper banknotes, they are functionally equivalent.
The relationship between the M0 and M1 money supplies is the money multiplier — basically, the ratio of cash and coin in people's wallets and bank vaults and ATMs to Total balances in their financial accounts. The gap and lag between the two (M0 and M1 - M0) occurs because of the system of fractional-reserve banking.
In this respect, all paper banknotes in existence are systematically linked to the expansion of the electronic, credit-based money supply. Coinage can be increased or decreased outside this system by Legal Mandate or Legislative Acts. However, at present the coin base is held in check and used as a complementary system rather than a competitive system with private bank issue of electronic, credit-based money. The common practice is to include printed and minted money supply in the same metric M0.
When thinking about the "supply" of money, it is natural to think of the total of banknotes and coins in an economy. That, however, is vastly incomplete. In the United States, coins are minted by the United States Mint, part of the Department of the Treasury, outside of the Federal Reserve. Banknotes are printed by the Bureau of Engraving & Printing on behalf of the Federal Reserve System. The Federal Reserve can also create book-keeping credits in the reserve accounts of its member banks, on the same terms as it can issue paper banknotes (by pledging collateral, usually in the form of US Treasury securities). As it always stands ready to exchange these book-keeping credits for paper banknotes, they are functionally equivalent.
The relationship between the M0 and M1 money supplies is the money multiplier — basically, the ratio of cash and coin in people's wallets and bank vaults and ATMs to Total balances in their financial accounts. The gap and lag between the two (M0 and M1 - M0) occurs because of the system of fractional-reserve banking.
In this respect, all paper banknotes in existence are systematically linked to the expansion of the electronic, credit-based money supply. Coinage can be increased or decreased outside this system by Legal Mandate or Legislative Acts. However, at present the coin base is held in check and used as a complementary system rather than a competitive system with private bank issue of electronic, credit-based money. The common practice is to include printed and minted money supply in the same metric M0.
Monetary Policy
Monetary policy is the process by which a government, central bank, or monetary authority manages the money supply to achieve specific goals. Usually the goal of monetary policy is to accommodate economic growth in an environment of stable prices. For example, it is clearly stated in the Federal Reserve Act that the Board of Governors and the Federal Open Market Committee should seek “to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.
Governments and central banks have taken both regulatory and free market approaches to monetary policy.
Some of the tools used to control the money supply include:
- currency purchases or sales increasing or lowering government spending
- increasing or lowering government borrowing
- the rate at which the government loans or borrows money
- manipulation of exchange rates
- taxation or tax breaks on imports or exports of capital into a country
- raising or lowering bank reserve requirements
- regulation or prohibition of private currencies
For many years much of monetary policy was influenced by an economic theory known as monetarism. Monetarism is an economic theory which argues that management of the money supply should be the primary means of regulating economic activity. The stability of the demand for money prior to the 1980s was a key finding of Milton Friedman and Anna Schwartz supported by the work of David Laidler, and many others.
History of Money
The first golden coins in history were coined by Lydian king Croesus, around 560 BC. The first Greek coins were made initially of copper, then of iron because copper and iron were powerful materials used to make weapons. Pheidon king of Argos, around 700 BC, changed the coins from iron to a rather useless and ornamental metal, silver, and, according to Aristotle, dedicated some of the remaining iron coins (which were actually iron sticks) to the temple of Hera.King Pheidon coined the silver coins at Aegina, at the temple of the goddess of wisdom and war Athena the Aphaia (the vanisher), and engraved the coins with a Chelone, which is to this day as a symbol of capitalism. Chelone coins were the first medium of exchange that was not backed by a real value good. They were widely accepted and used as the international medium of exchange until the days of Peloponnesian War, when the Athenian Drachma replace them. According other fables, inventors of money were Demodike (or Hermodike) of Kymi (the wife of Midas), Lykos (son of Pandion II and ancestor of the Lycians) and Erichthonius, the Lydians or the Naxians.
The history of money is a story spanning thousands of years. Related to this, Numismatics is the scientific study of money and its history in all its varied forms.Money itself must be a scarce good. Many items have been used as money, from naturally scarce precious metals and conch shells through cigarettes to entirely artificial money such as banknotes. Modern money (and most ancient money too) is essentially a token — in other words, an abstraction. Paper currency is perhaps the most common type of physical money today. However, goods such as gold or silver retain many of money's essential properties.
The history of money is a story spanning thousands of years. Related to this, Numismatics is the scientific study of money and its history in all its varied forms.Money itself must be a scarce good. Many items have been used as money, from naturally scarce precious metals and conch shells through cigarettes to entirely artificial money such as banknotes. Modern money (and most ancient money too) is essentially a token — in other words, an abstraction. Paper currency is perhaps the most common type of physical money today. However, goods such as gold or silver retain many of money's essential properties.
Numismatics
Numismatics (Latin: numisma, nomisma, "coin"; from the Greek: νομίζειν nomízein, "to use according to law"), is the scientific study of currency and its history in all its varied forms. While numismatists are often characterized as students or collectors of coins, the discipline also includes a much larger study of payment media used to resolve debts and the exchange of goods. Lacking a structured monetary system, people in the past as well as some today lived in a barter society and used locally found items of inherent or implied value. Early money used by primitive people is referred to as "Odd and Curious", but the use of other goods in barter exchange is excluded, even where used as a circulating currency (e.g., prison cigarettes). The Kyrgyz people used horses as the principal currency unit and gave small change in lambskins. The lambskins may be suitable for numismatic study, but the horse is not. Many objects have been used for centuries, such as conch shells, precious metals and gems.Today, most transactions take place by a form of payment with either inherent, standardized or credit value. Numismatic value may be used to refer to the value in excess of the monetary value conferred by law. This is also known as the "collector's value" or "intrinsic value."
History of Numismatics
Coin collecting has existed since ancient times - it is known that Roman Emperors were among some of the earliest coin collectors. It is called the "Hobby of Kings", due to its most esteemed founders. Numismatics reached its apex due to the great demand during the late Middle Ages and the early Renaissance. In this period ancient coins were collected a great deal by European royalty and nobility. It is known that Roman Emperors Augustus and Julius collected Greek coins. Other collectors of coins were Pope Boniface VIII, Italian poet Petrarch, Emperor Maximilian of the Holy Roman Empire, Louis XIV of France, Ferdinand I, Elector Joachim II of Brandenburg who started the Berlin coin cabinet and Henry IV of France to name a few. The science of numismatics is of comparatively recent origin. The ancients do not seem to have formed collections, although they appear to have occasionally preserved individual specimens for their beauty. Petrarch has the credit of having been the first collector of any note; but it is probable that in his time ancient coins were already attracting no little notice. The importance of the study of all coins has since been by degrees more and more recognised, and at present no branch of the pursuit is left wholly unexplored.
The 19th century was the most productive in building up national collections and in publishing catalogues. Theodor Mommsen fostered the idea of a general corpus of all Greek coins from all collections, an idea which has still yet to be realized
In 1931 the British Academy promoted the idea of the sylloge, systematic publications of single collections, according to mints and each coin illustrated. Some hundred volumes appeared until today. The idea was taken over by scholars of medieval Britain and in 1993 in the field of Islamic numismatics.
In the 20th century as well the coins were seen more as archaeological objects. After World War II in Germany a project, Fundmünzen der Antike (Coin finds of the Classical Period) was launched, to register every coin found within Germany. This idea found successors in many countries.
The 19th century was the most productive in building up national collections and in publishing catalogues. Theodor Mommsen fostered the idea of a general corpus of all Greek coins from all collections, an idea which has still yet to be realized
In 1931 the British Academy promoted the idea of the sylloge, systematic publications of single collections, according to mints and each coin illustrated. Some hundred volumes appeared until today. The idea was taken over by scholars of medieval Britain and in 1993 in the field of Islamic numismatics.
In the 20th century as well the coins were seen more as archaeological objects. After World War II in Germany a project, Fundmünzen der Antike (Coin finds of the Classical Period) was launched, to register every coin found within Germany. This idea found successors in many countries.
Modern Numismatics
Modern numismatics are the study of the coins of the mid 17th to the 21st century, the period of machine struck coins. Their study serves more the need of collectors than historians and it is more often successfully pursued by amateur afficionados than by professional scholars. The focus of modern numismatics lies frequently in the research of production and use of money in historical contexts using mint or other records in order to determine the relative rarity of the coins they study. Varieties, mint-made errors, the results of progressive die wear, mintage figures and even the socio-political context of coin mintings are also matters of interest.
Subfields:
Exonumia: is the study of coin-like objects such as token coins and medals, and other items used in place of legal currency or for commemoration. This includes elongated coins, encased coins, souvenir medallions, tags, badges, counterstamped coins, wooden nickels, credit cards, and other similar items. It is related to numismatics proper (concerned with coins which have been legal tender), and many coin collectors are also exonumists.
Notaphilly:is the study of paper money or banknotes. It is believed that people have been collecting paper money for as long as it has been in use. However, people only started collecting paper money systematically in Germany in the 1920s, particularly the Serienscheine (Series notes) Notgeld. The turning point occurred in the 1970s, when notaphily was established as a separate area by collectors. At the same time, some developed countries such as the USA, Germany and France began publishing their respective national catalogues of paper money, which represented major points of reference literature.
Scripophily :is the study and collection of stocks and Bonds. It is an interesting area of collecting due to both the inherent beauty of some historical documents as well as the interesting historical context of each document. Some stock certificates are excellent examples of engraving. Occasionally, an old stock document will be found that still has value as a stock in a successor company.
Subfields:
Exonumia: is the study of coin-like objects such as token coins and medals, and other items used in place of legal currency or for commemoration. This includes elongated coins, encased coins, souvenir medallions, tags, badges, counterstamped coins, wooden nickels, credit cards, and other similar items. It is related to numismatics proper (concerned with coins which have been legal tender), and many coin collectors are also exonumists.
Notaphilly:is the study of paper money or banknotes. It is believed that people have been collecting paper money for as long as it has been in use. However, people only started collecting paper money systematically in Germany in the 1920s, particularly the Serienscheine (Series notes) Notgeld. The turning point occurred in the 1970s, when notaphily was established as a separate area by collectors. At the same time, some developed countries such as the USA, Germany and France began publishing their respective national catalogues of paper money, which represented major points of reference literature.
Scripophily :is the study and collection of stocks and Bonds. It is an interesting area of collecting due to both the inherent beauty of some historical documents as well as the interesting historical context of each document. Some stock certificates are excellent examples of engraving. Occasionally, an old stock document will be found that still has value as a stock in a successor company.
Numismatists
The term numismatist applies to collectors and coin dealers as well scholars using coins as source or studying coins.
The first group chiefly derive pleasure from the simple ownership of monetary devices and studying these coins as private amateur scholars. In the classical field amateur collector studies have achieved quite remarkable progress in the field. Examples are Walter Breen is a well-known example of a noted numismatist who was not an avid collector, and King Farouk I of Egypt was an avid collector who had very little interest in numismatics. Harry Bass by comparison was a noted collector who was also a numismatist.
The second group are the coin dealers. These often called professional numismatists authenticate or grade coins for commercial purposes. The buying and selling of coin collections by numismatists who are professional dealers advances the study of money, and expert numismatists are consulted by historians, museum curators, and archaeologists.
The third category are scholar numismatists working in public collections, universities or as independent scholars acquiring knowledge about monetary devices, their systems, their economy and their historical context. Coins are especially relevant as source in the pre-modern period.
Early Currency
The origin of currency is the creation of a circulating medium of exchange based on a unit of account which quickly becomes a store of value. Currency evolved from two basic innovations: the use of counters to assure that shipments arrived with the same goods that were shipped, and later with the use of silver ingots to represent stored value in the form of grain. Both of these developments had occurred by 2000 BC. Originally money was a form of receipting grain stored in temple granaries in ancient Egypt and Mesopotamia.This first stage of currency, where metals were used to represent stored value, and symbols to represent commodities, formed the basis of trade in the Fertile Crescent for over 1500 years. However, the collapse of the Near Eastern trading system pointed to a flaw: in an era where there was no place that was safe to store value, the value of a circulating medium could only be as sound as the forces that defended that store. Trade could only reach as far as the credibility of that military. By the late Bronze Age, however, a series of international treaties had established safe passage for merchants around the Eastern Mediterranean, spreading from Minoan Crete and Mycenae in the North West to Elam and Bahrein in the South East. Although it is not known what functioned as a currency to facilitate these exchanges, it is thought that ox-hide shaped ingots of copper, produced in Cyprus may have functioned as a currency.In Africa many forms of value store have been used including beads, ingots, ivory, various forms of weapons, livestock, the manilla currency, ochre and other earth oxides, and so on. The manilla rings of West Africa were one of the currencies used from the 15th century onwards to buy and sell slaves. African currency is still notable for its variety, and in many places various forms of barter still apply.
Coinage
These factors led to the shift of the store of value being the metal itself: at first silver, then both silver and gold. Metals were mined, weighed, and stamped into coins. This was to assure the individual taking the coin that he was getting a certain known weight of precious metal. Coins could be counterfeited, but they also created a new unit of account, which helped lead to banking. Archimedes' principle was that the next link in currency occurred: coins could now be easily tested for their fine weight of metal, and thus the value of a coin could be determined, even if it had been shaved, debased or otherwise tampered with (see Numismatics).In most major economies using coinage, copper, silver and gold formed three tiers of coins. Gold coins were used for large purchases, payment of the military and backing of state activities. Silver coins were used for large, but common, transactions, and as a unit of account for taxes, dues, contracts and fealty, while copper coins represented the coinage of common transaction. This system had been used in ancient India since the time of the Mahajanapadas. In Europe, this system worked through the medieval period because there was virtually no new gold, silver or copper introduced through mining or conquest. Thus the overall ratios of the three coinages remained roughly equivalent.
Era of Hard and Credit Money
In premodern China, the need for credit and for circulating a medium that was less of a burden than exchanging thousands of copper coins led to the introduction of paper money, commonly known today as banknotes. This economic phenomenon was a slow and gradual process that took place from the late Tang Dynasty (618-907) into the Song Dynasty (960-1279). It began as a means for merchants to exchange heavy coinage for receipts of deposit issued as permissory notes from shops of wholesalers, notes that were valid for temporary use in a small regional territory. In the 10th century, the Song Dynasty government began circulating these notes amongst the traders in their monopolized salt industry. The Song government granted several shops the sole right to issue banknotes, and in the early 12th century the government finally took over these shops to produce state-issued currency. Yet the banknotes issued were still regionally-valid and temporary; it was not until the mid 13th century that a standard and uniform government issue of paper money was made into an acceptable nationwide currency. The already widespread methods of woodblock printing and then Bi Sheng's movable type printing by the 11th century was the impetus for the massive production of paper money in premodern China.
At around the same time in the medieval Islamic world, a vigorous monetary economy was created during the 7th-12th centuries on the basis of the expanding levels of circulation of a stable high-value currency (the dinar). Innovations introduced by Muslim economists, traders and merchants include the earliest uses of credit,cheques, promissory notes, savings accounts, transactional accounts, loaning, trusts, exchange rates, the transfer of credit and debt, and banking institutions for loans and deposits.
In Europe paper money was first introduced in Sweden in 1661. Sweden was rich in copper, thus, because of copper's low value, extraordinarily big coins (often weighing several kilograms) had to be made. Because the coin was so big, it was probably more convenient to carry a note stating your possession of such a coin than to carry the coin itself.Paper money was, in one sense, a return to the oldest form of currency: it represented a store of value backed by the credibility of the issuing authority. Drafts, letters of credit and checks issued privately had been in intermittent use for centuries, however, it was with the rise of global trade that paper money would find a permanent place in currency.The advantages of paper currency were numerous: it reduced transport of gold and silver, and thus lowered the risks; it made loaning gold or silver at interest easier, since the specie (gold or silver) never left the possession of the lender until someone else redeemed the note; and it allowed for a division of currency into credit and specie backed forms. It enabled the sale of stock in joint stock companies, and the redemption of those shares in paper.For these reasons, paper currency was held in suspicion and hostility in Europe and America. It was also addictive, since the speculative profits of trade and capital creation were quite large. Major nations established mints to print money and mint coins, and branches of their treasury to collect taxes and hold gold and silver stock.
At around the same time in the medieval Islamic world, a vigorous monetary economy was created during the 7th-12th centuries on the basis of the expanding levels of circulation of a stable high-value currency (the dinar). Innovations introduced by Muslim economists, traders and merchants include the earliest uses of credit,cheques, promissory notes, savings accounts, transactional accounts, loaning, trusts, exchange rates, the transfer of credit and debt, and banking institutions for loans and deposits.
In Europe paper money was first introduced in Sweden in 1661. Sweden was rich in copper, thus, because of copper's low value, extraordinarily big coins (often weighing several kilograms) had to be made. Because the coin was so big, it was probably more convenient to carry a note stating your possession of such a coin than to carry the coin itself.Paper money was, in one sense, a return to the oldest form of currency: it represented a store of value backed by the credibility of the issuing authority. Drafts, letters of credit and checks issued privately had been in intermittent use for centuries, however, it was with the rise of global trade that paper money would find a permanent place in currency.The advantages of paper currency were numerous: it reduced transport of gold and silver, and thus lowered the risks; it made loaning gold or silver at interest easier, since the specie (gold or silver) never left the possession of the lender until someone else redeemed the note; and it allowed for a division of currency into credit and specie backed forms. It enabled the sale of stock in joint stock companies, and the redemption of those shares in paper.For these reasons, paper currency was held in suspicion and hostility in Europe and America. It was also addictive, since the speculative profits of trade and capital creation were quite large. Major nations established mints to print money and mint coins, and branches of their treasury to collect taxes and hold gold and silver stock.
Legal Tender Era
With the creation of central banks, currency underwent several significant changes. During both the coinage and credit money eras the number of entities which had the ability to coin or print money was quite large. One could, literally, have "a license to print money"; many nobles had the right of coinage. Royal colonial companies, such as the Massachusetts Bay Company or the British East India Company could issue notes of credit—money backed by the promise to pay later, or exchangeable for payments owed to the company itself. This led to continual instability of the value of money. The exposure of coins to debasement and shaving, however, presented the same problem in another form: with each pair of hands a coin passed through, its value grew less.
The solution which evolved beginning in the late 18th century and through the 19th century was the creation of a central monetary authority which had a virtual monopoly on issuing currency, and whose notes had to be accepted for "all debts public and private". The creation of a truly national currency, backed by the government's store of precious metals, and enforced by their military and governmental control over an area was, in its time, extremely controversial. Advocates of the old system of Free Banking repealed central banking laws, or slowed down the adoption of restrictions on local currency.
At this time both silver and gold were considered legal tender, and accepted by governments for taxes. However, the instability in the ratio between the two grew over the course of the 19th century, with the increase both in supply of these metals, particularly silver, and of trade. This is called bimetallism and the attempt to create a bimetallic standard where both gold and silver backed currency remained in circulation occupied the efforts of inflationists. Governments at this point could use currency as an instrument of policy, printing paper currency such as the United States Greenback, to pay for military expenditures. They could also set the terms at which they would redeem notes for specie, by limiting the amount of purchase, or the minimum amount that could be redeemed.By 1900, most of the industrializing nations were on some form of gold standard, with paper notes and silver coins constituting the circulating medium. Governments too followed Gresham's Law: keeping gold and silver paid, but paying out in notes.
The solution which evolved beginning in the late 18th century and through the 19th century was the creation of a central monetary authority which had a virtual monopoly on issuing currency, and whose notes had to be accepted for "all debts public and private". The creation of a truly national currency, backed by the government's store of precious metals, and enforced by their military and governmental control over an area was, in its time, extremely controversial. Advocates of the old system of Free Banking repealed central banking laws, or slowed down the adoption of restrictions on local currency.
At this time both silver and gold were considered legal tender, and accepted by governments for taxes. However, the instability in the ratio between the two grew over the course of the 19th century, with the increase both in supply of these metals, particularly silver, and of trade. This is called bimetallism and the attempt to create a bimetallic standard where both gold and silver backed currency remained in circulation occupied the efforts of inflationists. Governments at this point could use currency as an instrument of policy, printing paper currency such as the United States Greenback, to pay for military expenditures. They could also set the terms at which they would redeem notes for specie, by limiting the amount of purchase, or the minimum amount that could be redeemed.By 1900, most of the industrializing nations were on some form of gold standard, with paper notes and silver coins constituting the circulating medium. Governments too followed Gresham's Law: keeping gold and silver paid, but paying out in notes.
Paper Money Era
- A banknote (more commonly known as a bill in the United States and Canada) is a type of currency, and commonly used as legal tender in many jurisdictions. With coins, banknotes make up the cash form of all modern money.
- A banknote (often known as a bill or simply a note) is a kind of negotiable instrument, a promissory note made by a bank payable to the bearer on demand, used as money, and in many jurisdictions is legal tender. Along with coins, banknotes make up the cash or bearer forms of all modern money. With the exception of non-circulating high-value or precious metal commemorative issues, coins are generally used for lower valued monetary units, while banknotes are used for higher values.
- A coin is usually a piece of hard material, usually metal or a metallic material, usually in the shape of a disc, and most often issued by a government. Coins are used as a form of money in transactions of various kinds, from the everyday circulation coins to the storage of vast amounts of bullion coins. In the present day, coins and banknotes make up the cash forms of all modern money systems. Coins made for circulation (general monetized use) are usually used for lower-valued units, and banknotes for the higher values; also, in most money systems, the highest value coin is worth less than the lowest-value note. The face value of circulation coins is usually higher than the gross value of the metal used in making them, but this is no longer generally the case with historical circulation coins made of precious metals. For example, the historical Eagle (United States coin) contained a troy ounce of gold and has a face value of only ten U.S. dollars, but the market value of the coin, due to its metal content, is now many times the face amount.
Modern Currencies
To find out which currency is used in a particular country, check list of circulating currencies.
Currently, the International Organization for Standardization has introduced a three-letter system of codes (ISO 4217) to define currency (as opposed to simple names or currency signs), in order to remove the confusion that there are dozens of currencies called the dollar and many called the franc. Even the pound is used in nearly a dozen different countries, all, of course, with wildly differing values. In general, the three-letter code uses the ISO 3166-1 country code for the first two letters and the first letter of the name of the currency (D for dollar, for instance) as the third letter.
The International Monetary Fund uses a variant system when referring to national currencies.
Privately Issued Currencies
From the earliest times token coins were issued by companies in remote parts of the world to overcome the shortage of circulating currency.Several large cmpanies issue points to their customers, to be redeemed for products and services produced by that company. Often, a network of companies will join to share in the offering and redemption of points. While these can hardly be considered stable currency systems, they present many of the same features as "legitimate" currency: they are a store of value, issued in discrete units; they are controlled by a central issuing authority; and they have varying rates of exchange with other forms of currency. For example, frequent flyer miles can be bought using U.S. dollars.
- Casino token: Chips are used in wagering for various reasons - mostly to make it easier to recognize or count the amount of a wager by eye, or (as in roulette or craps) to distinguish wagers belonging to different players that by necessity must be played near each other.
- Digital gold currency: Privately issued digital currency backed by gold .
- Frequent flyer miles: A type of private currency, different versions of which are issued by most major airlines to encourage customer loyalty. Other customer loyalty incentives have followed this model, including points systems offered by soft drink manufacturers such as PepsiCo.
- Subway tokens: issued by city transit authorities, can be considered a highly specialized form of currency.
- Alternative currency: A currency such as the Liberty Dollar that is intended to replace or compete with a national currency.
- Digital public transport currency:stored on a smart card and sold in exchange of real money.
- Scrip: A type of private currency where a certain value is captured, and used to purchase goods from a company. Examples of scrip include gift certificates, gift cards, Bugs Bunny Money, and Disney dollars, Canadian Tire Money and more recently Microsoft Points on the Xbox Live Marketplace. However, scrip is not considered a currency in itself, but merely a store of value, denominated in another currency.
Coupons: are a form of currency that is recognized by businesses, not to purchase a product or service, but to deduct from the total cost, promote benefits, rebates or discounts. Coupons are primarily used as a marketing tool. - Coupons: are a form of currency that is recognized by businesses, not to purchase a product or service, but to deduct from the total cost, promote benefits, rebates or discounts. Coupons are primarily used as a marketing tool.
Local Currencies
In economics, a local currency is a currency not backed by a national government, and intended to trade only in a small area. Advocates such as Jane Jacobs argue that this enables an economically depressed region to pull itself up, by giving the people living there a medium of exchange that they can use to exchange services and locally-produced goods (In a broader sense, this is the original purpose of all money.) Opponents of this concept argue that local currency creates a barrier which can interfere with economies of scale and comparative advantage, and that in some cases they can serve as a means of tax evasion.Local currencies can also come into being when there is economic turmoil involving the national currency. An example of this is the Argentine economic crisis of 2002 in which IOUs issued by local governments quickly took on some of the characteristics of local currencies.These currencies are also referred to as community currency. They encompass a wide range of forms, both physically and financially, and often are associated with a particular economic discourse.
Currency
A currency is a unit of exchange, facilitating the transfer of goods and/or services. It is one form of money, where money is anything that serves as a medium of exchange, a store of value, and a standard of value. A currency is the dominant medium of exchange. To facilitate trade between currency zones, there are exchange rates, which are the prices at which currencies (and the goods and services of individual currency zones) can be exchanged against each other. Currencies can be classified as either floating currencies or fixed currencies based on their exchange rate regime. In common usage, currency sometimes refers to only paper money, as in coins and currency, but this is misleading. Coins and paper money are both forms of currency.
In most cases, each country has monopoly control over the supply and production of its own currency. Member countries of the European Union's Economic and Monetary Union are a notable exception to this rule, as they have ceded control of monetary policy to the European Central Bank.
In cases where a country does have control of its own currency, that control is exercised either by a central bank or by a Ministry of Finance. In either case, the institution that has control of monetary policy is referred to as the monetary authority. Monetary authorities have varying degrees of autonomy from the governments that create them. In the United States, the Federal Reserve System operates without direct interference from the legislative or executive branches. It is important to note that a monetary authority is created and supported by its sponsoring government, so independence can be reduced or revoked by the legislative or executive authority that creates it. However, in practical terms, the revocation of authority is not likely. In almost all Western countries, the monetary authority is largely independent from the government.
Several countries can use the same name, each for their own currency (e.g. Canadian dollars and United States dollars), several countries can use the same currency (e.g. the euro), or a country can declare the currency of another country to be legal tender. For example, Panama and El Salvador have declared U.S. currency to be legal tender, and from 1791-1857, Spanish silver coins were legal tender in the United States. At various times countries have either re-stamped foreign coins, or used currency board issuing one note of currency for each note of a foreign government held, as Ecuador currently does.
In most cases, each country has monopoly control over the supply and production of its own currency. Member countries of the European Union's Economic and Monetary Union are a notable exception to this rule, as they have ceded control of monetary policy to the European Central Bank.
In cases where a country does have control of its own currency, that control is exercised either by a central bank or by a Ministry of Finance. In either case, the institution that has control of monetary policy is referred to as the monetary authority. Monetary authorities have varying degrees of autonomy from the governments that create them. In the United States, the Federal Reserve System operates without direct interference from the legislative or executive branches. It is important to note that a monetary authority is created and supported by its sponsoring government, so independence can be reduced or revoked by the legislative or executive authority that creates it. However, in practical terms, the revocation of authority is not likely. In almost all Western countries, the monetary authority is largely independent from the government.
Several countries can use the same name, each for their own currency (e.g. Canadian dollars and United States dollars), several countries can use the same currency (e.g. the euro), or a country can declare the currency of another country to be legal tender. For example, Panama and El Salvador have declared U.S. currency to be legal tender, and from 1791-1857, Spanish silver coins were legal tender in the United States. At various times countries have either re-stamped foreign coins, or used currency board issuing one note of currency for each note of a foreign government held, as Ecuador currently does.
Sunday, February 17, 2008
Historical Local Currencies
interest rate and could be converted into schillings at 98% of face value. An equivalent amount in The Wörgl experiment that was conducted from July 1932 to November 1933 is a classic example of the potential efficacy of local currencies. Wörgl is a small town in Austria with 4000 inhabitants that introduced a local scrip during the Great Depression. By 1932 unemployment in Wörgl had risen to 30%. The local government had amassed debts of 1.3 million Austrian schillings (AS) against cash reserves of 40,000 AS. Local construction and civic maintenance had come to a standstill. On the initiative of the town's mayor, Michael Unterguggenberger, the local government printed 32,000 in labor certificates which carried a negative 1% monthly schillings was deposited in the local bank as cover for the certificates in case of mass redemption and earned interest for the government. The certificates circulated so rapidly, that only 12,000 were ever actually put into circulation. According to reports by the mayor and economists of the day who studied the experiment, the scrip was readily accepted by local merchants and the local population. It utilized the scrip to carry out 100,000 AS in public works projects involving construction and repair of roads, bridges, tanks, drainage systems, factories and buildings. The scrip was also accepted as legal tender for payment of local taxes. In the one year that the currency was in circulation, it circulated 13 times faster than the official shilling and served as a catalyst to the local economy. The heavy arrears in local tax collection declined dramatically. Local government revenue rose from 2,400 AS in 1931 to 20,400 in 1932. Unemployment was eliminated, while it remained very high throughout the rest of the country. No increase in prices was observed. Based on the dramatic success of the Wörgl experiment, several other communities introduced similar scrips.
United States Dollar
The dollar (currency code USD) is the unit of currency of the United States. The U.S. dollar has also been adopted as the official and legal currency by the governments in a few other countries. The U.S. dollar is normally abbreviated as the dollar sign, $, or as USD or US$ to distinguish it from other dollar-denominated currencies and from others that use the $ symbol. It is divided into 100 cents.
Adopted by the Congress of the Confederation of the United States on July 6, 1785, the U.S. dollar is the currency most used in international transactions. Several countries use the U.S. dollar as their official currency, and many others allow it to be used in a de facto capacity.In 1995, over US $380 billion were in circulation, two-thirds of which was outside the United States. By 2005, that figure had doubled to nearly $760 billion, with an estimated half to two-thirds being held overseas, representing an annual growth rate of about 7.6%. However, as of December 2006, the dollar was surpassed by the euro in terms of combined value of cash in circulation. Since then the current value of euro cash in circulation has risen to more than €695 billion, equivalent to US$1,029 billion at current exchange rates.
Adopted by the Congress of the Confederation of the United States on July 6, 1785, the U.S. dollar is the currency most used in international transactions. Several countries use the U.S. dollar as their official currency, and many others allow it to be used in a de facto capacity.In 1995, over US $380 billion were in circulation, two-thirds of which was outside the United States. By 2005, that figure had doubled to nearly $760 billion, with an estimated half to two-thirds being held overseas, representing an annual growth rate of about 7.6%. However, as of December 2006, the dollar was surpassed by the euro in terms of combined value of cash in circulation. Since then the current value of euro cash in circulation has risen to more than €695 billion, equivalent to US$1,029 billion at current exchange rates.
The U.S. dollar uses the decimal system, consisting of 100 equal cents (symbol ¢). In another division, there are 1,000 mills or ten dimes to a dollar; additionally, the term eagle was used in the Coinage Act of 1792 for the denomination of ten dollars, and subsequently was used in naming gold coins. In the second half of the 19th century there were occasional discussions of creating a $50 gold coin, which was referred to as a "Half Union," thus implying a denomination of 1 Union = $100. However, only cents are in everyday use as divisions of the dollar; "dime" is used solely as the name of the coin with the value of 10¢, while "eagle" and "mill" are largely unknown to the general public, though mills are sometimes used in matters of tax levies and gasoline prices. When currently issued in circulating form, denominations equal to or less than a dollar are emitted as U.S. coins while denominations equal to or greater than a dollar are emitted as Federal Reserve notes (with the exception of gold, silver and platinum coins valued up to $100 as legal tender, but worth far more as bullion). (Both one-dollar coins and notes are produced today, although the note form is significantly more common.) In the past, paper money was occasionally issued in denominations less than a dollar (fractional currency) and gold coins were issued for circulation up to the value of 20 dollars.
U.S. coins are produced by the United States Mint. U.S. dollar banknotes are printed by the Bureau of Engraving and Printing, and, since 1914, have been issued by the Federal Reserve. The "large-sized notes" issued before 1928 measured 7.42 inches (188 mm) by 3.125 inches (79.4 mm); small-sized notes, introduced that year, measure 6.14 inches (156 mm) by 2.61 inches (66 mm) by 0.0043 inches (0.11 mm).
Notes above the $100 denomination ceased being printed in 1946 and were officially withdrawn from circulation in 1969. These notes were used primarily in inter-bank transactions or by organized crime; it was the latter usage that prompted President Richard Nixon to issue an executive order in 1969 halting their use. With the advent of electronic banking, they became less necessary. Notes in denominations of $500, $1,000, $5,000, $10,000, and $100,000 were all produced at one time; see large denomination bills in U.S. currency for details.
Dollar Sign
The symbol $, usually written before the numerical amount, is used for the U.S. dollar (as well as for many other currencies). An example would be "$14", which is read as "fourteen dollars". Some people believe that the sign for the dollar ("$"), is originated from the Spanish dollar which had a "P" over an "S" as the sign for their silver dollar. After and during the Revolutionary War Spain was backing the colonies dollar with their own. One Spanish dollar was about the same worth a U.S. dollar back when the U.S. was forming. Another possible origination was when the printing press accidentaly printed the U and the S overlapping, and then it evolved to look like the modern day $.
The sign is attested in business correspondence between British North America and Mexico in the 1770s, as referring to the Spanish-Mexican peso. The piastre was known as "Spanish dollar" in British North America, and in 1785, it was adopted as U.S. currency, together with both the term "dollar" and the $ sign. Interestingly, the first instance of the symbol on U.S.A. currency is on the reverse of a $1 coin first issued in February 2007, under the Presidential $1 Coin Act of 2005,.
The sign's ultimate origins are not certain, though it is widely accepted that it comes from the Spanish coat of arms, which carries the two Pillars of Hercules and the motto Non Plus Ultra in the shape of an "S".
The most widely accepted explanation is that the dollar sign derives from the Spanish coat of arms engraved on the Spanish colonial silver coins "Real de a Ocho" ("piece of eight") or Spanish dollar under circulation in the Spanish colonies of America and Asia, as well as in the English Thirteen Colonies and later the U.S. and Canada.
The most widely accepted explanation is that the dollar sign derives from the Spanish coat of arms engraved on the Spanish colonial silver coins "Real de a Ocho" ("piece of eight") or Spanish dollar under circulation in the Spanish colonies of America and Asia, as well as in the English Thirteen Colonies and later the U.S. and Canada.
The spanish coat of arms has two columns (), which represent the Pillars of Hercules and an "S"-shaped ribbon around each, with the motto "Non Plus Ultra" originally, and later "Plus Ultra".
In 1492, King Ferdinand II of Aragon put Gibraltar under the new joined rule of the Spanish throne. He adopted the symbol of the Pillars of Hercules and added the Latin phrase Non plus ultra – meaning "and nothing further", indicating "[this is] the end of the (known) world". But as Christopher Columbus in 1492 travelled to the Americas, the saying was changed to Plus Ultra – as there was more out there.This symbol was especially adopted by Charles V and was a part of his coat of arms as a symbol of his American possessions and riches. When the Spanish conquistadores found gold and silver in the New World, Charles V's symbol was stamped on the coins made from these metals. These coins with the Pillars of Hercules over two hemispheres (columnarios) were spread around America and Europe, and the symbol was ultimately adopted by the country that became the United States and by many of the continent's other independent nations. Later on, salesmen wrote signs that, instead of saying dollar, had this handwritten symbol, and in turn this developed to the simple S with two vertical bars.
National Currencies called "dollar"
Some of these are called dollars in English, but by a different name in the native language of the country. See the navigational box below for a complete list.The name has also been applied to the international dollar, a hypothetical unit of currency that has the same purchasing power that the U.S. dollar has in the United States at a given point in time.
Eurodollar
Eurodollars are deposits denominated in United States dollars at banks outside the United States, and thus are not under the jurisdiction of the Federal Reserve. Consequently, such deposits are subject to much less regulation than similar deposits within the United States, allowing for higher margins. There is nothing "European" about Eurodollar deposits; a US dollar-denominated deposit in Tokyo or Caracas would likewise be deemed Eurodollar deposits. Neither is there any connection with the euro currency.More generally, the "euro" prefix can be used to indicate any currency held in a country where it is not the official currency: for example, euroyen or even euroeuro.
History:Gradually, after the Second World War, the amount of U.S. dollars outside the United States increased enormously, both as a result of the Marshall Plan and as a result of imports into the U.S., which had become the largest consuming market after peace was reestablished in Europe.
As a result, enormous sums of U.S. dollars were in custody of foreign banks outside the United States. Some foreign countries, including the Soviet Union, also had deposits in U.S. dollars in American banks, granted by certificates.
During the Cold War period, especially after the invasion of Hungary in 1956, the Soviet Union feared that its deposits in North American banks would be frozen as a retaliation. It decided to move some of its holdings to the Moscow Narodny Bank, a Soviet-owned bank with a British charter. The British bank would then deposit that money in the US banks. There would be no chance of confiscating that money, because it belonged to the British bank and not directly to the Soviets. On February 28, 1957, the sum of $800,000 was transferred, creating the first eurodollars. Initially dubbed "Eurbank dollars" after the bank's telex address, they eventually became known as "eurodollars"as such deposits were at first held mostly by European banks and financial institutions.
Gradually, as a result of the successive commercial deficits of the United States, the eurodollar market expanded worldwide.
History:Gradually, after the Second World War, the amount of U.S. dollars outside the United States increased enormously, both as a result of the Marshall Plan and as a result of imports into the U.S., which had become the largest consuming market after peace was reestablished in Europe.
As a result, enormous sums of U.S. dollars were in custody of foreign banks outside the United States. Some foreign countries, including the Soviet Union, also had deposits in U.S. dollars in American banks, granted by certificates.
During the Cold War period, especially after the invasion of Hungary in 1956, the Soviet Union feared that its deposits in North American banks would be frozen as a retaliation. It decided to move some of its holdings to the Moscow Narodny Bank, a Soviet-owned bank with a British charter. The British bank would then deposit that money in the US banks. There would be no chance of confiscating that money, because it belonged to the British bank and not directly to the Soviets. On February 28, 1957, the sum of $800,000 was transferred, creating the first eurodollars. Initially dubbed "Eurbank dollars" after the bank's telex address, they eventually became known as "eurodollars"as such deposits were at first held mostly by European banks and financial institutions.
Gradually, as a result of the successive commercial deficits of the United States, the eurodollar market expanded worldwide.
Rupee
The Rupee (₨ or Rs.) (Hindi and other Indian languages: Rupiya, from Sanskrit rupyakam meaning coins of silver) is the common name for the currencies used in India, Pakistan, Sri Lanka, Nepal, Mauritius, Seychelles; in Indonesia the unit of currency is known as the rupiah and in the Maldives the rufiyah. The Indian rupee and the Pakistani rupee are subdivided into one hundred paise or pice (singular paisa) and the Nepalese rupee can be subdivided into one hundred paisa or pice (both singular and plural) or four Sukas (sing. Suka) or two Mohors (sing. Mohor).
The origin of the word "rupee" is found in the Sanskrit word rūp or rūpā, which means "silver" in many Indian languages. The Sanskrit word rūpyakam (Devanagari:रूप्यकम्) means coin of silver.
The origin of the word "rupee" is found in the Sanskrit word rūp or rūpā, which means "silver" in many Indian languages. The Sanskrit word rūpyakam (Devanagari:रूप्यकम्) means coin of silver.
Dinar
The dinar -- denar in Macedonian -- is the currency unit of many countries. The word "dinar" (دينار in Arabic and Persian, динар /dinar in Serbian, денар in Macedonian) is derived from denarius, a Roman currency.
The dinar was introduced into circulation in 1931, replacing the Indian rupee, which had been the official currency since the British occupation of the country in World War I, at a rate of 1 dinar = 13⅓ rupees. The dinar was pegged at par with the British pound until 1959 when, without changing its value, the peg was switched to the U.S. dollar at the rate of 1 dinar = 2.8 dollars. By not following the devaluations of the U.S. currency in 1971 and 1973, the dinar rose to a value of US$3.3778, before a 5% devaluation reduced the value of the dinar to US$3.2169, a rate which remained until the Gulf War, although in late 1989, the black market rate was reported as being five to six times (1.86 dinars for US$1) higher than the official rate.
The dinar was introduced into circulation in 1931, replacing the Indian rupee, which had been the official currency since the British occupation of the country in World War I, at a rate of 1 dinar = 13⅓ rupees. The dinar was pegged at par with the British pound until 1959 when, without changing its value, the peg was switched to the U.S. dollar at the rate of 1 dinar = 2.8 dollars. By not following the devaluations of the U.S. currency in 1971 and 1973, the dinar rose to a value of US$3.3778, before a 5% devaluation reduced the value of the dinar to US$3.2169, a rate which remained until the Gulf War, although in late 1989, the black market rate was reported as being five to six times (1.86 dinars for US$1) higher than the official rate.
Japanese Yen
The yen (円, en ) or en is the currency of Japan. It is the third most-traded currency in the foreign exchange market after the United States dollar and the euro. It is also widely used as a reserve currency after the U.S. dollar, the euro and the pound sterling. The ISO 4217 codes for the yen are JPY and 392. The romanised symbol is ¥ while in Japanese it is also written with the kanji 円. While not a usage specific to currency, large quantities of yen are often counted in multiples of 10,000 (man, 万) in the same way as values in the United States are often quoted or rounded off to hundreds or thousands.
In standard Japanese, the yen is pronounced "en" but the spelling and pronunciation of "yen" is standard in English, due to a historical Portuguese transliteration. The inclusion of the letter y is based on romanization of an obsolete writing of the word which included the kana ゑ (ye/we), examples of which can also be found in such words as Yebisu, Iyeyasu, and Yedo (it was still pronounced, however, as e). Like the spellings of names of people outside Japan, the romanization of yen has become a permanent feature.
In standard Japanese, the yen is pronounced "en" but the spelling and pronunciation of "yen" is standard in English, due to a historical Portuguese transliteration. The inclusion of the letter y is based on romanization of an obsolete writing of the word which included the kana ゑ (ye/we), examples of which can also be found in such words as Yebisu, Iyeyasu, and Yedo (it was still pronounced, however, as e). Like the spellings of names of people outside Japan, the romanization of yen has become a permanent feature.
Saudi Riyal
The riyal (Arabic: ريال, ISO 4217 code: SAR) is the currency of Saudi Arabia. It is abbreviated as ر.س or SR. It is presently subdivided into 100 halala (Arabic: هللة).
The riyal has been the currency of Saudi Arabia since the country came in to being and was the currency of Hejaz before Saudi Arabia was created. The Hejaz riyal was based on (though not equivalent to) the Ottoman 20 kuruş coin and was consequently divided into 20 ghirsh. However, although the Hejaz riyal was the same weight as the Ottoman 20 kuruş, it was minted in .917 fineness, compared to .830 fineness for the Ottoman coin. Thus, because the first Saudi riyal had the same specifications as the Hejaz riyal and circulated alongside Ottoman coins, it came to be worth 22 Ottoman kuruş and was consequently subdivided into 22 ghirsh when coins denominated in ghirsh were issued from 1925. This remained the system of currency even though the riyal was subsequently debased to a coin equivalent in silver content to the Indian rupee in 1935.
Note that the Latin alphabet spelling "ghirsh" rather than "qirsh" reflects the pronunciation in Saudi Arabia, whilst in the Arabic script the spelling was the same as used elsewhere, قرش.
In 1960, the system was changed to 20 ghirsh = 1 riyal and this was followed in 1963 by the introduction of the halala, worth one hundredth of a riyal. Some Saudi coins still bear denominations in ghirsh but this denomination is no longer commonly used.
The riyal has been the currency of Saudi Arabia since the country came in to being and was the currency of Hejaz before Saudi Arabia was created. The Hejaz riyal was based on (though not equivalent to) the Ottoman 20 kuruş coin and was consequently divided into 20 ghirsh. However, although the Hejaz riyal was the same weight as the Ottoman 20 kuruş, it was minted in .917 fineness, compared to .830 fineness for the Ottoman coin. Thus, because the first Saudi riyal had the same specifications as the Hejaz riyal and circulated alongside Ottoman coins, it came to be worth 22 Ottoman kuruş and was consequently subdivided into 22 ghirsh when coins denominated in ghirsh were issued from 1925. This remained the system of currency even though the riyal was subsequently debased to a coin equivalent in silver content to the Indian rupee in 1935.
Note that the Latin alphabet spelling "ghirsh" rather than "qirsh" reflects the pronunciation in Saudi Arabia, whilst in the Arabic script the spelling was the same as used elsewhere, قرش.
In 1960, the system was changed to 20 ghirsh = 1 riyal and this was followed in 1963 by the introduction of the halala, worth one hundredth of a riyal. Some Saudi coins still bear denominations in ghirsh but this denomination is no longer commonly used.
Peso
The peso (Spanish: "weight") is a unit of currency that originated in Spain and is now used by several former Spanish colonies. The peso coin weighed 27 grams and was of 92 percent pure silver.[citation needed]Today the term peso is sometimes used interchangeably to include the historic Spanish eight real coin (also called the Spanish dollar or colloquially "pieces of eight"), which was the main Spanish coin during colonial times. This is primarily because pesos were of similar weight and diameter to the eight real coin. However the term peso did not appear on Spanish coinage until 1864, and it is more accurate to refer to the older coinage as the eight real coin (or Spanish dollar, or "pieces of eight").
The peseta is also a unit of currency whose name may be a diminutive of peso.The pataca (圓) is a unit of currency which means peso in Portuguese.
The peseta is also a unit of currency whose name may be a diminutive of peso.The pataca (圓) is a unit of currency which means peso in Portuguese.
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