My Money Week, 9 th of May, Cluj-Napoca The concept of MONEY b y Gabriel Dombri
“ I am not interested in money but in the things of which money is the symbol. ” [ Henry Ford]
What is the difference between these banknotes?
What is the difference between these items?
So, then: What is money?
Money = any object accepted as means of exchange within a certain society or social context.
To create money, we need: + a social circumstance (i.e. the others) + a market + some objects (useful or not) + some needs or wishes + some perceived value + lots of trust in one another!
Money is an instrument with various functions: "Money is a matter of functions four, a medium, a measure, a standard, a store."
The functions: 1. A medium of exchange
The functions: A medium of exchange A unit of account
The functions: A medium of exchange A unit of account A standard of deferred payment
The functions: A medium of exchange A unit of account A standard of deferred payment
The functions: A medium of exchange A unit of account A standard of deferred payment A store of value
Commodity money = is money whose value comes from a commodity out of which it is made. It is objects that have value in themselves as well as for use as money.
Commodity money = Gold Silver Copper Cattle Stones Shells Barley Cigarettes Candy
Representative money = Objects that don’t have real value in themselves, but their value come from either the commodities they stand for or from a government regulation or law.
Representative money Commodity-backed money Fiat money
Representative money Commodity-backed money Fiat money Gold certificates Silver certificates
Representative money Commodity-backed money Fiat money Gold certificates Silver certificates Bills of credit Banknotes Coins All our money
Monetary systems and institutions: Banks Gold standard Bretton Woods System Nixon shock
100,000 years ago -> Barter methods Gift economy
100,000 years ago -> Barter methods Gift economy 3000 BC -> Mesopotamia – the shekel Americas, Asia, Africa – shell money
Shell money
6500 BC -> Lydia – the silver coins Europe, Asia – metal coins 7 th century AD -> China – first paper money Medieval Italy, Flanders – paper money
Lydian coin: First paper money, China Denaris banales :
19 th century -> Europe – gold & silver standard, banknotes USA – gold standard, banknotes 20 th century -> Bretton Woods – gold & dollar 1970’s – Fiat dollar Cards, ATMs
21 th century -> Financial institutions Credit & debit cards Online payments
I am: Gabriel Dombri Marketing consultant E: gabriel@burcash.ro W: www.burcash.ro W : www.gabrieldombri.com
