Money is
historically an emergent market phenomenon establishing a commodity as money,
but nearly all contemporary money systems are based on fiat money. Fiat money,
like money equals happiness,
any check or note of debt, is without use value as a physical commodity. It
derives its value by being declared by a government to be legal tender; that
is, it must be accepted as a form of payment within the boundaries of the
country, for "all debts, public and private". Such laws in practice
cause fiat money to acquire the value of any of the goods and services that it
may be traded for within the nation that issues it. Learn how to develop your Financial IQ, free by clicking
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Many
cultures around the world eventually developed the use of commodity money,
after all money is life. The
Mesopotamian shekel was a unit of weight, and relied on the mass of something
like 160 grains of barley. The first usage of the term came from Mesopotamia
circa 3000 BC. Societies in the Americas, Asia, Africa and Australia used shell
money – often, the shells of the cowry (Cypraea moneta L. or C. annulus L.).
According to Herodotus, the Lydians were the first people to introduce the use
of gold and silver coins. It is thought by modern scholars that these first
stamped coins were minted around 650–600 BC.
The word
"money" is believed to
originate from a temple of Juno, on Capitoline, one of Rome's seven hills. In
the ancient world Juno was often associated with money. The temple of Juno
Moneta at Rome was the place where the mint of Ancient Rome was located. The
name "Juno" may derive from the Etruscan goddess Uni (which means
"the one", "unique", "unit", "union",
"united") and "Moneta" either from the Latin word
"monere" (remind, warn, or instruct) or the Greek word
"moneres" (alone, unique).
Money acts
as a standard measure and common denomination of trade. It is thus a basis for
quoting and bargaining of prices. It is necessary for developing efficient
accounting systems.
The money
supply of a country consists of currency (banknotes and coins) and, depending
on the particular definition used, one or more types of bank money (the
balances held in checking accounts, savings accounts, and other types of bank
accounts). Bank money, which consists only of
records (mostly computerized in modern banking), forms by far the largest part
of broad money in developed countries in either corporate or individuals as
part of personal finance.
