Breve Historia del Dinero

Jose Figuereo

23 Jan 201110:56

Summary

TLDRThis script narrates the intriguing history of money, from bartering to the invention of coins in Lydia and the Roman Empire, to the exploitation of the Americas for gold and silver. It details the evolution of paper money and banking, the shift from gold-backed currencies to fiat money, and the pivotal moment when the US suspended the dollar's convertibility to gold in 1971. The script ends with a reflection on the speculative nature of modern finance and a poetic critique of the banking system.

Takeaways

😀 The script provides a brief history of money, starting from bartering to the creation of coins and paper currency.
📚 Initially, various items like cocoa beans, seashells, and feathers were used as currency in different cultures.
🏛 The Roman Empire paid soldiers with salt, which is where the word 'salary' originates.
🌍 In different regions, trade was conducted using local items like rice in the Philippines, dog teeth in New Guinea, and shells in Peru.
🏺 The first known coins were minted in modern-day Turkey over 2500 years ago, made of gold and silver.
👑 Kings and rulers minted their own coins, often adorning them with symbols and portraits.
📚 The term 'money' comes from the Latin 'denarius,' a widely used Roman coin.
💰 The invention of money made trade easier, allowing for transactions like selling chickens for coins and buying shoes with them.
🔱 Alchemists often deceived people by coating other metals with a thin layer of gold.
👨‍🦳 European monarchs and nobility needed gold to mint coins and expand their territories, leading to the exploration for gold by adventurers like Christopher Columbus.
💰 The gold and silver from the Americas facilitated an unprecedented accumulation of wealth and the birth of European capitalism.
📜 The Chinese invented paper money during the Tang dynasty, and banks were established to exchange gold for promissory notes or bills of exchange.
🏦 European banks began issuing notes in the late 10th century, with each nation printing its own paper currency.
🏦 The business of banks involves taking deposits and investing the money in various ventures, including high-interest loans, known as usury.
💵 The gold standard, where paper money was backed by gold, was disrupted by World War I, leading to the overprinting of currency without gold reserves.
💲 After World War II, the US dollar was established as the world's reserve currency at the Bretton Woods conference, with the creation of the International Monetary Fund.
📉 President Nixon's decision in 1971 to suspend the convertibility of the US dollar to gold marked a significant shift in the global economic system, leading to the current fiat currency system.

Q & A

What was the initial form of economy before the concept of money was established?
-The initial form of economy was based on barter, where goods and services were directly exchanged without the use of money.
What were some of the items used as a form of currency in different cultures before the invention of coins?
-Items such as cacao seeds, seashells, ivory, amber, and quetzal feathers were used as a form of currency in various cultures.
Why did the term 'salary' originate from the word 'salary' in Latin?
-The term 'salary' comes from the Latin word 'salarium', which was originally a bag of salt given to Roman soldiers as payment for their services.
Where were the first known coins minted, and what were they made of?
-The first known coins were minted in present-day Turkey over 2500 years ago and were made of gold and silver.
What does the word 'denarius' signify in Roman history, and how is it related to the modern word 'money'?
-The 'denarius' was a widely used coin in the Roman Empire, and the word 'money' derives from 'denarium', the Latin term for this coin.
Why did people start biting coins to verify their authenticity?
-People bit coins to check if they were made of soft gold or silver, as a way to ensure they were genuine and not counterfeit.
What was the main reason for European monarchs and nobility needing gold to mint coins and consolidate their territories?
-Gold was needed for minting coins to facilitate trade and commerce, and to symbolize wealth and power, which helped in consolidating their territories.
What was the primary objective of Christopher Columbus's voyages when he set sail to the New World?
-Christopher Columbus's primary objective was to find gold, as well as other spices like pepper, nutmeg, and cinnamon.
How did the accumulation of gold and silver from the Americas contribute to the development of European capitalism?
-The vast amounts of gold and silver from the Americas allowed for an unprecedented accumulation of wealth, which in turn gave rise to the development of European capitalism.
What was the significance of the invention of paper money in China during the Tang Dynasty?
-The invention of paper money in China simplified transactions and reduced the need to carry heavy metal coins, paving the way for modern banking and paper currency.
What event marked the end of the gold standard and the beginning of fiat money in the United States?
-The end of the gold standard and the beginning of fiat money in the United States was marked by President Nixon's declaration on August 15, 1971, suspending the convertibility of the US dollar into gold.

Outlines

00:00

📜 The Evolution of Money

The early human economy was based on barter, with various items such as cacao seeds, shells, and salt being used as money. The concept of salary originates from the Roman practice of paying soldiers with salt. Different cultures used diverse items as money until the invention of coins over 2500 years ago in Turkey. Coins were made of gold and silver and facilitated trade by providing a standardized medium of exchange. However, issues like coin counterfeiting and the heavy weight of carrying large amounts of coins led to further innovations in money.

05:00

💶 The Rise of Paper Money and Banking

In the 9th century, the Chinese invented paper money and banks, which significantly influenced global commerce. Europeans began issuing paper money in the 10th century, leading to a system where people deposited gold in banks in exchange for paper notes. This practice evolved into banks using deposited money for investments, including lending at high interest rates. The reliance on gold as a money standard persisted until the World Wars, when nations started issuing unbacked paper money. Post-World War II, the US dollar became the global monetary standard, with significant economic consequences.

10:02

📈 Financial Speculation and Economic Bubbles

Speculators in financial markets buy and sell stocks, driving prices beyond their real value and creating financial bubbles. Neoliberal policies have inflated the economy's perceived value, leading to economic instability. The script concludes with a quote from revolutionary poet Bertolt Brecht, emphasizing that founding a bank can be more criminal than robbing one, highlighting the deep issues in the financial system.

Mindmap

Keywords

💡Barter

Barter refers to the exchange of goods or services without the use of money. It is a direct trade where one party gives something to receive something else in return. In the context of the video, barter is mentioned as the initial form of economy before the invention of money, illustrating the simplicity of early human trade.

💡Currency

Currency is any item or verifiable record that is generally accepted by members of a society as payment for goods and services and repayment of debts in a particular country or socio-economic context. The video discusses various forms of currency throughout history, such as cocoa beans, seashells, and coins, highlighting the evolution of what we understand as money today.

💡Salarium

The term 'salarium' originates from the Latin word 'salarium,' which was a type of money used by the Romans to pay soldiers, often in the form of a bag of salt. In the video, it is used to illustrate the historical development of the concept of a salary, showing how the word itself has financial roots.

💡Coinage

Coinage refers to the process of minting coins, which are standardized forms of currency. The video mentions the first known coins were minted in modern-day Turkey over 2500 years ago, made of gold and silver, and how different rulers would mint their own coins with their emblems and faces.

💡Alchemist

An alchemist is a person who practices alchemy, a medieval chemical science and speculative philosophy aiming for the transmutation of base metals into noble ones, such as gold. In the video, alchemists are mentioned as individuals who would plate other metals with a thin layer of gold to deceive, showing the early manipulation of currency.

💡Colonialism

Colonialism is the policy or practice of acquiring full or partial control over another country, area, or people, occupying it with settlers, and exploiting it economically. The script discusses how colonial powers, particularly Spain and Portugal, extracted vast amounts of gold and silver from the Americas, illustrating the economic exploitation inherent in colonial practices.

💡Paper Money

Paper money is a type of currency consisting of banknotes that are used as a substitute for coins of gold or silver. The video explains that the Chinese invented paper money during the Tang dynasty, which was a significant innovation in monetary systems, leading to the development of banks and promissory notes.

💡Banking

Banking is the activity of accepting deposits of money from the public and lending them in the form of loans. The script explains how banks originated and evolved, including the issuance of banknotes and the practice of lending money at high interest rates, which is a central theme in the video's discussion of the development of financial systems.

💡Bretton Woods

The Bretton Woods system was an international monetary arrangement established in 1944 that pegged most of the world's major currencies to the U.S. dollar, which was in turn convertible into gold. The video discusses the Bretton Woods conference and how it established the U.S. dollar as the world's reserve currency, leading to significant economic changes.

💡Nixon Shock

The Nixon Shock refers to U.S. President Richard Nixon's announcement in 1971 that ended the convertibility of the U.S. dollar into gold. This decision is highlighted in the video as a pivotal moment in economic history, marking the end of the gold standard and the beginning of a new era of fiat currency.

💡Financial Bubble

A financial bubble occurs when the price of an asset, such as real estate or stocks, rises to levels significantly above its fundamental value, often driven by speculation. The video mentions financial bubbles in the context of the stock market, illustrating the potential for economic instability and the disconnect between asset prices and their real value.

💡Neoliberalism

Neoliberalism is a political and economic philosophy that advocates for free market capitalism, deregulation, and reduction in government spending. The script criticizes neoliberalism for leading to a 'great lie' in the global economy, suggesting that it has contributed to economic disparities and the overvaluation of assets.

Highlights

The evolution of money from barter system to various forms of currency throughout history.

Early forms of money included cocoa beans, seashells, ivory, amber, and quetzal feathers.

The Roman Empire paid soldiers with a bag of salt, from which the word 'salary' originates.

Different societies used unique items for trade, such as rice grains in the Philippines and dog teeth in New Guinea.

The first known coins were minted in modern-day Turkey over 2500 years ago, made of gold and silver.

Greek rulers minted their own coins, adorned with emblems and portraits.

In Rome, a 'denarius' was the daily wage, and the word 'money' comes from 'denarium'.

The invention of money facilitated trade, with chickens being sold for coins and the coins used to buy shoes.

Alchemists were often fraudsters who coated other metals with a thin layer of gold.

People would bite coins to verify their authenticity.

European nobility needed gold for minting coins and expanding their domains.

Christopher Columbus sought gold and spices in the New World, leading to the exploitation of the Americas.

Spanish and Portuguese invaders extracted vast amounts of gold and silver from American mines.

The Catholic Church was complicit in and benefited from the plundering of American resources.

The influx of American gold and silver led to the accumulation of wealth and the birth of European capitalism.

The Chinese invented paper money during the Tang dynasty, and banks started issuing notes in the 10th century.

European banks began issuing banknotes in the late 10th century, with each nation printing its own paper currency.

Banks operate by taking deposits and using the money for investments, including industries and stocks.

Gold was the standard for money, with bank reserves backing paper currency.

During World War I, nations began printing money without gold reserves, leading to inflation.

After the war, countries stored their reserves in the form of foreign currencies, particularly the British pound.

The Bretton Woods conference in 1944 established the US dollar as the world's reserve currency.

The US printed excessive amounts of dollars without gold backing, leading to European distrust.

President Nixon suspended the convertibility of the dollar to gold in 1971, marking a significant economic breach.

The value of the dollar became uncertain, as it was no longer backed by gold.

Speculators in the stock market can create financial bubbles by driving stock prices above their real value.

Neoliberalism has led to an economy based on speculation and inflated values, contrasting with the real economy.

The history of money concludes with the thought that founding a bank is a greater offense than robbing one.