The History of Gold as Wealth

Sunny

Monday, 13 November 2023

502 Hits

Money is not something you just print. It must be backed by something, either good economy or gold !
By Mahathir Mohamad, 2020

Turning Gold Into Cash Gold is an example of the most dynamic components of the modern economy and some might find it funny the oldest form of valuing physical commodities is still prospering today. The first gold coins were produced in seven hundred BC and since that point the dear metal has been used as the first exchange component. The fact that gold was scanty and highly valued made it the ideal ways of exchange, irrespective of what the exchanged items were. The history of gold turning into money spans over a period of 2600 years and the turning point in gold's history is the year 1971. How Did Gold Become Paper? Throughout history, gold and silver coins went thru a method of debauching. Such coins started to be made out of gold and other metals, thus making the values of the particular coinage change in time. The method of turning physical gold into cash started when goldsmiths, who used to store gold for other society members for a fee, started to issue receipts for their storage.

The bills idea spread quickly as it was faster than carrying the metal with them, so folks started to get accustomed to the idea of paper money. Goldsmiths steadily turned into financiers and the currency evolutionary process continued developing. Why Did The Gold Window Close? The fifteenth of Aug 1971 is the day when the Gold window was closed by the American president Richard Nixon. From that moment on, paper cash could not be converted to gold, a fact that took the valuable metal out of currency exchanges. To appreciate why the situation with gold in the economy reached this point, let's travel back in time to the instant when financiers saw the break of replacing metal with paper money. Since they'd the power of supplying the invoices for gold, financiers thought of manufacturing more bills than the amount of gold they held. But, as you would expect, this practice also became favored and financiers shortly started lending these invoices to the early executives and to the sovereigns of the epoch. New Acts And Rules Concerning the application of Gold Britain was the country where financiers made the 1st central bank.

The main point of such a bank was to loan money to sovereigns, but it also served as protection for those financiers who issued more money than they could redeem in gold. However, it became obvious this practice had a negative effect on the state's economy.

This lead to the apparition of the Peel's Bank Act, which said that banks are not permitted to issue more paper money than the gold they had in reserves. Therefore, the significance of gold as a decisive factor in the world economy stayed high all thru modern financial history. What did you know About Modern Gold? An fascinating evolution of gold costs commenced in 1934, when gold was priced at $ twenty.

In the period till 1971, the gold price stayed around $35. However, with the changes that happened in the world economy, gold costs reached $300 and they stayed above or awfully near this threshold. Varied factors in the geopolitical world had their influences on the development of modern gold costs.

Can Gold be Controlled? Do you ever think about gold when you're going to work or whilst shopping? Though our modern society perceives gold more as a fashion item, countries still depend on the power of the valuable metal to keep their economies balanced. We may not see gold in stores, whilst paying our taxes, or whilst taking credits from a bank, but it is a factor seriously concerned in all these actions.

It is fair to claim that, thru human history, we were regularly the ones being controlled by this precious metal, and not vice versa, as most of the people believe.