Hello everybody! Today I’m going to give a presentation on the History of money. My talk consists of three parts: first part is about barter trade and commodity money, second about specie and third is about paper money. If you have any questions, give them at the end of my presentation. So let’s start.
We all use money every day. It is essential because if we want to buy some food, clothes, etc. we have to pay money for these goods. Money is recognized as banknotes and coins. However, many years ago people couldn’t go to the shop and buy what they wanted. They had to exchange some merchandise or services to other goods or services and this process is called barter trade. It was a really difficult procedure the barter often depends on a coincidence of wants. Giving an illustration, the seller of grain has to find a buyer who wants to buy grain and who also could offer something the seller wants to buy. And one more example, if a wheat farmer needs what a fruit farmer produces, a direct swap is impossible because seasonal fruit would spoil before the grain harvest. The solution is to trade fruit for wheat indirectly through a third, intermediate, commodity. Intermediate commodity or in other words commodity money has to be imperishable, attractive in demand, etc. For example, it can be cattle, salt, shells, wine and so on. These commodity money had disencumbered (palengvino) barter trade from difficulties. However, commodity money had their disadvantages, for example cattle, fur, precious stones couldn’t be cut into smaller pieces and it was uncomfortable to keep and transport .
Because of the minuses of commodity money, people had to invent simpler way to continue the trade. And they invented specie or...
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