The first country to use gold coins

According to Herodotus, an ancient Greek historian, Lydia was the first known country to cast and use gold and silver coins. Lydia is a rich ancient kingdom located in the west of Asia Minor in 700 BC, about 200 miles away from the Aegean Sea in Greece. Lydia is located in the east-west traffic artery of various civilized regions, and the prosperous trade and commercial activities have produced natural requirements for the exchange of gold coins in circulation. Moreover, Lydia is located on the bank of Pectoles, rich in alluvial placer gold, and the fundamentals of gold supply are good.

Crois, the last emperor of Lydia, made a new coin-Stat, which had a far-reaching influence on later generations. Stadt is composed of 24K pure gold, which can be subdivided into smaller units such as 1/3, 1/6,112, thus promoting the development of troy ounces. Moreover, crois adopts the double standard system of gold and silver, and uses silver coins in occasions where the transaction amount is small.

The transformation of gold as a currency has important sociological significance and contributed to the popularization of gold. From then on, the use and possession of gold is no longer the privilege of the king.

In the Roman Empire, although the national strength is strong and the territory is vast, the annual output of gold is at least 5 tons, but the extravagant Romans still face a serious shortage of gold. They have to face three solutions that many countries will encounter in the future: one is to endure the shortage of money supply and the pain of depression and deflation; The second is to import gold from other regions, whether it is looting or trading; Third, casting more coins with the same amount of metal, that is, currency depreciation.

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The touchstone that we often say today was invented by Lydians. This is a kind of black stone. The goldsmith marks the gold wares on the black stone, and then compares the marks with a set of 24 test needles with different combinations of gold, silver and copper. If it matches the stripes drawn by the No.24 test needle, it means that this gold ware is pure gold.

02

Newton, the matchmaker of gold and pounds.

Trade is inseparable from money. When metal money can't meet modern trade, paper money comes into being. So is the pound. As the standard monetary unit in Britain, the British pound was originally issued by the Bank of England, which was established in 1694.

18 16 is an important and memorable year for the currency history of the whole world. Because in this year, Britain passed the "Gold Standard Act", which recognized gold as the monetary standard for the first time in the form of law. 182 1 year, Britain officially launched the gold standard system, and the pound became the British standard monetary unit, with 0.2583 ounces of pure gold per 1 pound.

The gold standard makes the exchange rate between currencies simple and stable, and creates conditions for the development of international trade, so the global economy and trade has experienced a hundred years of prosperity.

If we study the British gold standard carefully, we can trace the history back to 100. 1696, Newton (yes, the famous Newton who invented calculus, solved the mystery of the composition of light and explored the law of gravity, and was considered as the founder of modern science) became the head of the Royal Mint. 17 17, Newton, then director of the mint, made a bold decision. According to the gold content of gold coins at that time, the price of gold was set at 3 pounds per ounce 17 shillings 10.5 pence. From then on, the pound was linked to gold, and paper money entered the circulation field as a substitute for money, while gold was used as a measure of value. This is the classic gold standard that lasted for two centuries.

Because the pound is backed by gold, it has quickly become the currency that investors, traders and governments all over the world are scrambling to buy.

The gold standard ensures the stability of British domestic currency and price. During the period of 65,438+0,750-65,438+0,965,438+04, the overall price in Britain only increased by 48%, which created conditions for Britain's industrialization and successfully transformed Britain from an agricultural country to an industrial country.

By the beginning of the 20th century, the pound had become the most important international payment means and reserve currency in the capitalist world. However, everything in the world can't escape the law of "extremes meet". 19 14 years, World War I broke out. In order to raise more military expenses, the British government printed a large number of pounds, which greatly increased the pressure on pounds to exchange for gold. The British government had to abolish the gold standard and stop the circulation of gold coins and the exchange of gold.

Although Churchill, then the British Chancellor of the Exchequer, resumed the gold bar standard on May 1925, he was forced to give up on September 2 1 day due to the subsequent Great Depression of the world economy. Since then, the pound has never recovered, and the status of the international reserve currency tends to decline, gradually being replaced by the US dollar.

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The development process of the gold standard is shown in the following table.

Table of major events in the development of gold standard system

Source: kindleberger's Financial History of Western Europe.

03

bad money drives out good

We can often see this phenomenon in our life: for example, there are two kinds of people at a bus stop, one is queuing according to the rules, and the other is jumping in line without rules. When the bus came, the people who jumped the queue got on the bus first, but those who obeyed the rules didn't get on the bus, so they had to wait. After a while, another bus came and the situation was still the same. The unruly people got on the bus, and the disciplined people were still waiting. The third bus has stopped. Who will line up? Almost no one!

The above phenomenon is a very famous law in economics: bad money drives out good money.

The law that bad money drives out good money, also known as Gresham's law, is an interesting phenomenon discovered by British economist Gresham more than 400 years ago: when two currencies with different actual values but the same nominal value circulate at the same time, the currencies with higher actual values, that is, good money, will inevitably withdraw from circulation-they will be collected, melted or exported abroad; Money with lower real value, that is, bad money, flooded the market.

/kloc-In Britain in the 6th century, the mining of precious metals was gradually insufficient to meet the needs of coinage, and other metal components had to be added to the newly minted currency. So there were two kinds of money on the market at that time: one was money without impurities, and the other was money with other metals added. These two currencies have the same legal value, but people are willing to store the currency without impurities and trade it with the currency with impurities. Therefore, good money on the market (those without impurities) is gradually stored, reducing circulation, leaving only bad money on the market.

Another situation in which bad money drives out good money occurs under the dual standard of gold and silver. From18th century to19th century, Anglo-American law adopted the dual standard of gold and silver for a long time. Because the exchange rate of gold coins and silver coins is determined by the government through laws, it will remain stable for a long time, but the relative price of gold and silver in the market will fluctuate because of the law of supply and demand. If the actual value of gold exceeds the legal exchange rate, people will melt larger gold coins (good coins) into gold nuggets and then sell them for silver coins (bad coins). After this procedure, you can get more silver coins than directly exchanging gold coins for silver coins. Sometimes people even repeat this process many times, resulting in the melting of good money and the reduction of bad money in the market, which will flood the market and seriously disrupt the market order. The "good money" here does not refer to the currency with high unit price, but refers to the currency with advantages over the exchange rate. Assuming that the legal exchange rate of gold coins to silver coins is 1: 10, if 1 gold coins can be converted into silver coins above 10 after melting, then gold coins are good coins; If 10 silver coins can be converted into gold coins above 1 after melting, then silver coins are good coins. )

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In China, as early as the 2nd century BC, Jia Yi of the Western Han Dynasty pointed out the fact that "money is being stolen more and more, but money is dying", which has the same effect as "bad money drives out good money". Here, "raping money" refers to bad money, and "positive money" refers to good money.

04

Silver standard system in Qing dynasty

Like gold, silver has been used as legal tender or monetary raw material in many countries in the world in history, which has the function of financial reserve and has also been used as an important means of international payment.

The ancients in China had a long history of understanding and using silver, and they made silver into handicrafts and money long ago. Silver was widely used as currency in ancient China after the Tang and Song Dynasties. In the Yuan Dynasty, the silver standard system was further strengthened, and the government took silver as the main currency, and silver ingots appeared. In the Ming and Qing Dynasties, the silver standard system was constantly consolidated and strengthened. In the Ming dynasty, the silver system was implemented, and the value was calculated by the weight of metal, which belonged to the weighing currency system.

The monetary system of the Qing Dynasty basically followed the Ming Dynasty, using copper coins and silver coins, and in a short period of time, some of them were used to transfer official banknotes and Qing Dynasty banknotes. Generally, silver is used for large transactions, and copper is used for small and sporadic transactions. Due to the development of social economy, the use of silver is more common and its position is more important. It was not until the second year of Xuantong in the Qing Dynasty (A.D. 19 10) that the Qing court decided to "take silver as the standard for the time being", promulgated the Regulations on Monetary System, officially adopted the silver standard system, and issued one-dollar silver coin with a weight of seven cents and twenty cents, which was named Daqing Silver Coin as the main national currency.

At the end of the Qing Dynasty, the monetary system of 10 was discussed, which ended with the determination of the silver standard by the court, but the Qing Dynasty also fell almost at the same time. At the end of the Qing Dynasty and the beginning of the Republic of China, financiers at home and abroad put forward numerous schemes, and finally continued to adopt the silver standard system. Different from before, they began to cast "national currency"-that is, the silver dollar called "Yuan Datou" by later generations to show their sovereign credit.

1On March 8, 933, the National Government promulgated the Regulations on the Foundry of Silver Standard Currency; In April of the same year, the practice of "turning waste into circle" was implemented, and the national unified silver coin-"Sun Yat-sen's head" silver circle was issued. 1935, the national government carried out monetary reform and announced the abolition of the silver standard. At this point, China's silver standard came to an end.

05

Bretton Woods System

The Bretton Woods system refers to the international monetary system centered on the US dollar after the Second World War.

1In July, 944, representatives of major western countries established the system at the United Nations International Monetary and Financial Conference, and it was called the Bretton Woods System because it was held in Bretton Woods, New Hampshire, USA. GATT, as a supplement to the 1944 Bretton Woods Conference, together with the agreements adopted by the Bretton Woods Conference, is called the Bretton Woods System, that is, a multilateral economic system with foreign exchange liberalization, capital liberalization and trade liberalization as its main contents, which constitutes the core content of capitalist groups.

The Bretton Woods system is an international gold exchange standard, which established the central position of the US dollar in the international monetary system after the Second World War. The dollar became the "equivalent" of gold, and the United States undertook the obligation to exchange gold at the official price. The dollar is at the center and plays the role of the world currency. This system was maintained until 197 1, and was finally abolished by President Nixon. The Bretton Woods Conference also led to the establishment of the World Bank and the International Monetary Fund.

Think about it.

What is the root cause of the final collapse of the Bretton Woods system?