What Silver Can Successfully Claim Over Paper Money

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Something else that gold and silver can successfully claim over paper money is a far longer track record and history of actual utilization. Paper money finds its origins a few hundred years ago in the early modern age in Europe as a promise to pay gold.

What Silver Can Successfully Claim Over Paper Money The Chinese used it in the seventh century in their empire, but with the caveat that it could be changed in for metal money at any time.

Gold and silver were used as mediums of exchange long before today’s concept of money even existed.

Gold first found its way into jewelry by 3000 BC. The Sumerian Royal Tombs in Ur contained such gold jewelry and art, in what is now Southern Iraq. By 1500 BC, gold had evolved to become the standard basis of inter kingdom and regional trade in the Middle East. Even as far away as South America, the Chavin civilization found uses for gold in ornaments and trade by 1200 BC.

The first gold and silver coins actually proved to be a combination of the two precious metals called electrum. The ancient Kingdom of Lydia located in Turkey holds the honor of being the first place to manufacture such coins. They did this about 650 BC with their coins that had a Lion head on them.

About a hundred years later, the Lydians developed an advanced process of separating out silver and gold into the two metal elements. They introduced these first gold coins by 560 BC. It took only two hundred years for individual gold coins and silver coins to develop into the world’s currency standard that became utilized in all forms of trade.

This resulted from the Persian Empire capturing the Lydian capital Sardis only thirteen years after they such gold coins had first been created. The Persian Emperor Cyrus stared in amazement at the gold coins that he found in the Kingdom of Lydia and determined that he would produce such coins himself.

With the Persians discovering how to mint gold coins, they spread their use of them all over their empire that spanned from India in the East to Libya and Egypt in the Southwest and Northern Greece and Thrace in the Northwest.

Silver also has a long and distinguished history. Mankind has been aware of it and using it since Prehistoric times. Its discovery occurred just after that of copper and gold. The Bible references it for the first time in history in Genesis.

Silver was considered to be the second most perfect metal after gold.

The ancients regarded silver as a practically sacred metal assuring that it would be utilized for special purposes such as coinage.

Silver coins gained great popularity as a currency in the city states of Ancient Greece. While the Persians were spreading the use of gold coins throughout the East and Middle East, the Greeks traded far and wide throughout the entire Mediterranean using their beloved silver coins. Their colonies found as far away as Southern Spain used silver coins in daily trade and transactions.

Between the efforts of the Persians and the Greeks, gold and silver coinage developed into the world standards for money that was accepted all over the known world. This did not change with time. Gold and silver coins have proven to be the only enduring standard of money all the way up to your own day and time.

Until only forty years ago, gold and silver were still the basis of even paper money. As mentioned before, paper money traces its history back to the Chinese who first invented paper in the second century AD. They had invented and began using paper money that they called flying money in the seventh century. Their paper money included the promise that it could be converted into real money coins at any point.

Thus, the first paper money, and most paper money that followed if for many centuries, only represented the actual money of gold and silver. This made it a promissory note of sorts, a promise by a government to exchange it for real money based on gold or silver.

The concept of paper money as a substitute for real gold and silver money did not gain acceptance in Europe for a long time afterward. Marco Polo returned from his epic adventures to China attempting to explain to his countrymen that in the East they used paper money to represent actual metal money. He was laughed at by his fellow Europeans.

Paper money arose in the sixteen hundreds in Europe.

The Bank of England printed some of the first widely accepted of these Goldsmith notes. They, like the ancient Chinese paper notes, represented promissory notes to pay gold for deposits on account. The notes contained a promise to pay the note bearer on demand for so many pounds in gold. Once again, the paper did not turn out to be the money. The gold that underlay the paper promises proved to be the money.

Subsequent efforts at creating widely accepted paper money continued as Central Banks began to arise and take over the functions of issuing currency in the modern world. In the United States and Great Britain, this happened in the 1700’s and 1800’s. Standardized paper money proved to be popular and enduring. Yet it still only represented a promise to pay the holder a set amount of gold or in some cases silver. These silver certificates are highly sought out by collectors today.

An experiment with true paper money that did not represent actual gold or silver money began only forty years ago. The jury is still out on how long such paper currency backed up by only government promises will endure. One thing is for certain, it will be a long time before stand alone paper money has a significant track record behind it like gold and silver currency, and the hybrid notes that merely represented it.

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