You all have money. It’s sitting in your pocket, or on your desk, right now. It is very important to you and takes up a great deal of your attention. At times your whole life seems to be only about the acquisition of more and more money. However, have you ever though about what this money thing really is? What is it really worth? How does it get that value? Why does money change in value? How does money get made? What is fake money and how to spot the fakes? And the questions you all ask: How can I make more money for myself?
Look at some different money
Euros from a European country.
One Euro coins.
Some old money
A long long time ago there was no money. People had to exchange one thing or another thing. This was called barter. But barter had two main problems. First, the seller must want the thing that buyer is offering. Second two people must evaluate the worth of each other’s items to get a fair price. Just how many chickens do you need to buy a cow? How about sheep? Can I exchange two bags of potatoes for one of the tomatoes or is that unfair? It gets complicated quickly.
To solve these problems, people started to use some things as money. The earliest money was found in China. People there used a kind of seashell as money. In Europe, people used salt as money. The word “salary” (to be paid for work) comes from the Latin word “sal” meaning “salt”. People used to be paid monthly for work using salt as the money.
Many countries used grain for money. Cups of gain were easy to store and measure. However, grain had problems of supply and demand. If there was a big harvest, prices went up to balance. If there was a bad harvest, people would eat the grain and prices would have to fall. Thus the money’s value fluctuated frequently.
Better forms of money were precious metals. We still sometimes use these today. Things like gold and silver. However, the money in your pocket is not made from gold or silver. Your coins are made of copper, zinc, tin and nickel.
Today coins are round. However early Chinese coins were different shapes. Some of the earliest look like knives or spades. Later round coins with a square hole became popular in China.
The first paper money was invented in China during the Yuan dynasty. Poor economic controls meant that the idea didn’t take off. The first modern banknotes come from Sweden.
Now we are changing money again. People use plastic cards to pay in shops. These bank cards are safer than carrying large amounts of money in your pocket.
These coins are all very old. The oldest is about 2000 years old and comes from Rome. The others are about 500 to 800 years old and date to the medieval period.
Look Close at some money
If you look close at some paper money, you’ll see there is a special pattern to the drawings. The dots are not random like most photographs, magazine and newspaper pictures. There is a pattern to the dots and lines that make up the image. This pattern is repeated on every note. So it is very easy to spot a difference in the pattern and see a fake.
Above, and American Dollar close up.
An English £5 note close up.
The above is a pure gold coin, produced in Canada. It’s value is 1,000,000 dollars. Lucky we don’t need that much money in change.
Money exchange markets
When you go on holiday, you have to change your money into the other countries currency. How can you do this and what are the advantages and disadvantages of each?
- At the Bank of China
- At a foreign Bank
- At a Currency Exchange shop in the airport
- At the hotel
- Outside the bank on the black market trade