Although “penny” was never official verbiage in America (the coins were a “one cent” pieces) the English colonial experience made them pennies to the public, even to the present day. The US cent and the English penny have run a somewhat parallel course. Before we go further, thanks to Kevin at yoga Murfreesboro for this amazing article.
The English pennies were themselves descended from earlier coins, in a direct line of inheritance from the Roman denarius. The British pound was valued at 240 pence, echoing the Roman pound, valued at 240 denarii.
Receiving counterfeit money while in a strange country is something that is not required when traveling abroad. In fact, no one thinks to look up what to do when in a foreign country in case a counterfeit bill is received. It is not out of the question that when money changes hands in a foreign country, especially with tourists, that a counterfeit bill may be involved. If caught circulating this bill, you could be in serious trouble with the authorities of that country, which not only ruins the trip but goes a lot deeper than that.
Perhaps you have begun to learn the benefits of a gold investment, and along the way you have been hearing a lot about investing in rare coins. Now it is time to do some due diligence to learn about the benefits of rare gold coins. After all, aren’t gold bullion coins less expensive and easier to acquire for precious metals investors? Isn’t it wise to invest in gold bullion, such as gold bullion coins like American Eagles, or Credit Suisse gold bars for gold IRA’s? Gold, whether coin or bar, bullion or rare, is still gold, isn’t it?
The answer is yes. There are however, several advantages rare investment grade coins contain that gold bullion coins do not. Rare coins are no longer minted, therefore what is out there in the world is what is available. Investors and collectors alike favor a longer hold period with rare coins compared to bullion for their gold investment portfolio, making rare coins less available on the market. Continue reading “Why Gold And Why Not Cash?”
Last time we went deep into the history of what money started out as and what it actually came to be; today, we’ll look at valuation and other concepts of what makes money a currency that we count on every day. We’re not loners here at Money Liberty and always appreciate help, especially from a professional commercial real estate guru like Don Hardon, who gets that shout out for being our guest blogger today. Let Don take you down a rabbit hole of valuation in his take on what makes those pieces of paper in your wallet worth anything. And don’t forget to check out his yoga website as well. Enjoy!
My granddaughter loves the above music from artist M.I.A. so I get an earful when I’m visiting. “Paw Paw, check this out, I know you’ll like it. ” And honestly, mostly I don’t but being a hobbyist ponderer of wealth and money I couldn’t help but notice some themes in the tune. Money is what we want and sometimes we’re willing to just about anything to get our hands on it. What makes this piece of paper in my wallet worth even the paper it’s printed upon? Millions and millions of dollars circulating that cost labor and time to create as well as the raw materials like ink and cotton seem to just about all of us extremely valuable flat rectangles to keep around. Why? A solution many would offer is it’s worth something because we all agree that is valuable. Have you studied the dollar bill lately? Next to our first President’s dour face is a quote that is supposed to allay any of these fears. Go ahead and pull one from your pocket or bum one from a friend to read it yourself in the context of this article. Legal tender it proclaims to be and everyone has to accept it as so, right?
The concept of fiat money is that the government that creates and distributes said money is in power and uses that power to tell everyone that the pieces of paper are indeed worth what they say they are. An interesting side note here : if you draw up a contract of any type there can be a distinction in what actual currency the contract should be paid in whether it be drachmas, dollars or even beaver pelts. No amount of other currency can fulfill the contract fees if it’s saying there must be a different one. Interesting, right? Try to get your landlord to take your rent only in beans and see how that works out.
Humor aside there is a dark and bizarre true reason why the money we use every day has actual value : we all agree that it has value. Simple and startling, this concept is entirely based upon the masses as a whole accepting something that is far from fact as complete economic canon. When you start to see the currency reality from this vantage point the idea that value comes from government decree seems less important and far less plausible as a long term solution to exchanges and valuations. The true reason that money is all powerful in our current case is that not only do we all agree in concept that the money has worth but we build a network of effect that makes sure it stays that way. If you have a telegraph you can communicate only with other people that also have a telegraph. If you have an American dollar you will only be able to transact with another person who is willing to see that dollar in the same way that you do thereby establishing that effect of an underlying network.
Gold has been and continues to be a stalwart exception to the pull of these effects and other movements of currency since it’s inception. Since time before history gold has been positioned and used as everyone’s favorite mode of transacting and you won’t find many people even today unwilling to exchange their product and service for it’s value in gold. Inmates in jails and prisons across the world (especially in America) use a common currency you might be familiar with if you own an ashtray : cigarettes. Again the ideas from the last blog article on the history of money showed that whether their pelts, shells, gold nuggets or a Lucky Strike there are methods and vessels of value that stand aside from the generalities of a fiat currency. What you have already realized reading that last bit is that these items have something even more than just people willing to accept as “money.” Pelts, cigarettes and gold all have actual uses whether it’s coats, a relaxing puff of nicotine and carcinogens or making a fancy goblet to toast your subjects with at a banquet. Logical use and aesthetic appreciation are two ways that these items listed became currencies of their own.
Imagine yourself alone on a deserted island after a plane crash with two recovered suitcases. Some wealthy person from the plane must have had a lot of wealth because there’s one of the cases is full of one hundred dollar bills. Another of the late passengers might have been a frugal grandmother because her suitcase is full of dried snacks, foods and hotel toiletries like soap and blankets. Unless you have a different kind of body chemistry than me I bet those 100 dollar bills won’t be much use in getting you food. Maybe they will make better kindling as burnable paper. The snacks have real use possibility while the previously important paper currency is just there to burn and not much else. (Think: toilet paper maybe? )
I’m not advocating you go to your bank, drain your accounts and start using fives and tens as bathroom tissue. What I’m trying to illuminate is that money isn’t what you necessarily think it is because it’s not really anything but design, ink, paper and promises. Once you break free of the idea that “money is money” and by itself radiates some kind of inherent worth then you can begin to see the rabbit hole’s edges. If Money Liberty likes this article, I’ll write another next time and we’ll dive right in. Until then, count your pennies, at least they have some zinc in them.
Thanks, Don! We’ll definitely have Don back for another guest blog because who can resist learning more about the unknown? Meanwhile, we’re still asking for Likes on our Facebook page and definitely give us a follow on Twitter. Find yourself here again next time at Money Liberty and liberate your mind from traditional money ideas. See you soon!
Are you ready to have your eyes opened to the biggest lie in the world? Don’t turn back now as you’re going to truly become free from this important information. Money Liberty is here to pull the wool from your eyes and show you the real story behind the currency we put some much faith in and let rule our everyday lives. As we begin we will take a look at the history of money. Enjoy.
Money! What is it really? Where did this money in our pockets really come from? From errant objects to minted coins to the paper likely in your wallet right now these trinkets are little more than symbols of value instead of having an inherent valuation by themselves. The value we place on money is derived from it’s role as a way to exchange in lieu of the goods we’re hoping to attain by using that money. We can work together in production of things we want to own and pay people for the things they do for us with this money-based exchange concept. We have even been told that stockpiling these heavily symbolized objects we can achieve degrees of financial security. The value of the money exists in the circular logic that since we collectively value it then it continues to have singular value.
You can go back thousands of years and see that money has played some role in our development. Before all these coins and papers we most likely used different kinds of bartering systems that fit the cultures and communities involved. When you barter the exchange is a direct action for products or actions by the other participant. Maybe early man would offer a tool he or she had made in return for help with hunting a large mammal. The issue with this kind of system is scarcity as you will have to find a certain someone with something you want and then hope that someone wants what you have whether they are goods or services. One way around this would be to mitigate the original offer in a way that appeals to the available party. Either way you think of it, bartering was ( and is ) a slower process than the current kind of currency exchange we take for granted today.
The slow process of bartering gave rise to another not so fast advancement : staple goods for trade and bartering. If you’re a modern caveman or early human you probably have use for things like tools, weapons and animal skins for your clothing. As salt became the spice of choice for both preservation and food taste it was also a natural choice for staying high up on the barter most wanted list. To this day you can find many primitive societies who still use these kind of staple goods for their continued system of daily bartering.
What about knives as money? Seriously! Although they can’t fit in your wallet there was a time where cutlery was currency. Early Chinese bartering evolved from literally trading a spade for a knife, for example, to trading a tiny simulacrum figurine of the spade for a similar tiny crafted example of the knife. After what must have been some damaging pocket diving the figures were molded into less dangerous shapes like the coin shape we see today. If you’ve got some jingle jangle in your pocket today you can trace that little bit of technology all the way back to these ancient Chinese barterers. Not to be outdone by the ingenious Chinese in another part of the world some hundreds of years later the Lydians were hatching their own ideas about exchange and making it easier. Using stamped visages of animals like ferrets and bison on coins made from the mixture electrum, Lydians could trust that “one fox is good for a small clay bowl” for example. The Lydians became very rich due to this advancement in trade thanks to their silver and gold mixture coins. All those coins couldn’t buy enough swords to defend them against the Persians though and the kingdom of Lydia, along with it’s currency ideas, fell away from history from the wars against them.
Imagine you’re Marco Polo : you just got to China and you’re getting the grand tour of the place. What’s this people are using in the markets? Paper? What’s all this paper for? The Chinese must be mentioned here again as they moved from their figures of objects to early coinage to paper money fairly quickly. A tidy line of writing on all these Chinese papers intended to be used as an early form of what we call money promised the removal of the cranium of counterfeiters which dissuaded folks from making copies in their own homes.
Coins caught on far faster than the idea of paper money among Europeans. The wealth of rare materials amassed from many, many years of pillaging and conquering made it very obvious to continue minting these useful pieces of rare metals. Eventually all those heavy bags and laden horse carts with tons of coins got too tiresome for the major powers that ruled so there was a switch to something lighter. The formation of banks as we know them today came from this movement towards paper currencies as they were the private institutions that made it work for people who wanted to store money as well as borrow against their hopeful futures.
Now money isn’t heavy. Now money can be backed by private organizations which lived by their positive reputations. We began to tie the power and value of the money we kept in our coffers to the organizations and governments that issued said paper pieces. More recently disruptive innovations like electronic transfers, mobile pay systems and the like have moved the story a little farther. Even the emergence of crytpo currencies like Bitcoin began to tear away at the idea that we needed a physical representation.
And that’s where we come to the true point : why did it take so long for us as humans to throw off the shackles of government and private interests to decide on our own system of valuation? We’ll be exploring these themes and much, much more as we continue blogging here on Money Liberty. Please, stick with us with a Bookmark and follow us on our Facebook page. You’ve got to wake up! We’ve got the alarm bell and it’s about to start ringing. Until next time, watch your wallet.