Currency Discussion

[M37]

I was wondering if anyone here is interested in discussing currency.
- I don’t know why but the history of currency seems to be such an intresting and often forgotten bit. Why? We all use currency in one form or another.
-
Here are some things to consider
1. Why do we use bits of paper and copper/tin/ etc as currency?
2. What ever happened to gold currency?
3. How old is the currency we use? - How long has the Dollar/ Pound/ Euro etc been around?
3. I’m Curious if any Europeans here can tell me what it was like to switch from franks, guilders, marks etc to the Euro. – Do you still keep some of the old currency around?
4. What is the future of currency?
5. How many denominations of currency are best? How many partitions should their be in the standard amount i.e how many cents should be in a dollar or a pound?
6. What is the most expensive currency in the world? I.e. One X of this currency is worth more than one of every other currency? – I’m guessing it’s the pound

:2cents:

[HunterX]

1. A lot easier than carrying bags of grain around or dragging goats to trade for video games.

2. Not enough gold to make enough coin.

3. Ancient Mesopotamia. Used copper if I'm not mistaken.

3.2. I'm not European.

4. Milar will replace paper and each "bill" will have an RFID tag to prevent counterfitting, if we don't go to a completely "paperless money" society, which will in all honesty never happen.

5. No idea really. Personally, I think the denominations should be metric. i.e. 100 parts of a currency is 1 of that curency (see the US penny). Currency demoninations should be a round number, which the denominations are now. In fact the system is pretty much the way it should be in that respect. How many denominations? Depends on the system of trade and whether parts of the currency are used in trade.

6. You have to look at it in terms of how much of currency X does it take to purchase 1 of currency Y. Currently, I believe it's either the British Pound or Japanese Yen.

[Eboli]

6. The Bahraini dinar will get you $2.66 US while the British Pound will get you $1.91. (All approx). So unless I missed one I believe it's the most expensive.

Actually scratch that, the Kuwaiti dinar at $3.34 US and the Maltese Lira at $2.74 US are worth more. The KWD being the most valuable in the world.

[FallenSoloSLS]

1 and 2 - I believe it was Nixon who finally made the wise move to take the U.S. off of the gold standard. Until that time, theoretically each unit of currency had somewhere in storage a portion of gold that was equal to the value of that currency.

Wikipedia has this article on the Gold Standard. (http://en.wikipedia.org/wiki/Gold_standard)

The gold standard is a monetary system in which the standard economic unit of account is a fixed weight of gold and all currency issuance is to one degree or another regulated by the gold supply.

Now, I believe, currency is supposed to be valued based upon the overal wealth and strenght of the country of origin's economy and it's economic worth.

With regards to the "future of currency", I don't think it'd be a stretch for anyone on these boards to see a future where units of currency are more important than the physical pieces of paper and coin. I'm sure I'm not unusual on these board, or in the population at large in that I'm using less and less "currency", but am still making transactions with dollars and cents via electronic means. The value of the unit is ultimately what's important, not the physical vehicle the unit represents.

Regarding #5 - I recall an elected official here in the U.S. advocating the elimination of the penny ($.01) from our standard currency. I think that proposition went nowhere.

[HunterX]

With regards to the "future of currency", I don't think it'd be a stretch for anyone on these boards to see a future where units of currency are more important than the physical pieces of paper and coin. I'm sure I'm not unusual on these board, or in the population at large in that I'm using less and less "currency", but With regards to the "future of currency", I don't think it'd be a stretch for anyone on these boards to see a future where units of currency are more important than the physical pieces of paper and coin. I'm sure I'm not unusual on these board, or in the population at large in that I'm using less and less "currency", but am still making transactions with dollars and cents via electronic means. The value of the unit is ultimately what's important, not the physical vehicle the unit represents.am still making transactions with dollars and cents via electronic means. The value of the unit is ultimately what's important, not the physical vehicle the unit represents.

While I agree with this, there will never be a completely "paperless currency" world. Yes we will use less and less physical currency (hell I pay all of my bills elctronically and use a debit card a lot), but there will always be a need for physical currency, at least for the foreseeable future. Paperless currency requires certain inafastructre that simply doesn't exist in parts of the world still and too many people prefer to do business is physical currency because it's a lot harder to track where it came from, where it's going, and who bought what and when (and I'm not talking just people doing naughty things with the drug and weapon trade).

[Psymon]

dragging goats to trade for video games.Oh man, I have the best mental picture ever now. Some guy's trying to shove a goat into an arcade machine.

2. What ever happened to gold currency?Gold became more valuable than the coins. There's a similar ituation going on in the UK now. Because older two pence coins (from before the 90s or something) have a higher copper content than modern ones, and because of the increase in the price of copper, the copper in the old two pences is worth three pence. Ok, so that was a bizarre and garbled explanation, but it boils down to 'old two pence coins can be sold for three pence'.

[vecctor]

I think most of the questions you have could be answered by this article: http://en.wikipedia.org/wiki/Currency

[Dante]

Psymon, same thing happened with the US penny. Ones before 1982 (I believe) are solid copper, whilst ones after that have a soft chewey nickle inside.

Debit Card>All

Actually it has become a really bad habbit of mine to never carry around monies. I usually end up borrowing cash from a friend and then paying back with a check! I just find it so much easier to swipe rather than to deal with that dirty dirty paper.

[Rafta]

3. I’m Curious if any Europeans here can tell me what it was like to switch from franks, guilders, marks etc to the Euro. – Do you still keep some of the old currency around?
The currency change wasn't that hard to get familiar with for me. I still have some Schilling around but not much.
Sometimes I still calculate in Schilling and mostly my value measurement is still based on the old currency.

[Wargrim]

I experienced 2 currency changes, from Ostmark to D-Mark, and from D-Mark to Euro. You need some days to get used to the various sized and colours of the money, and somehow all prizes got slightly higher if you calculated before/after in the old currency, but apart from that, i had no problems with it.

[Elukka]

I think i actually got used to the Euro quite fast, i haven't been counting money in Finnish marks for years now. I don't think i have any old coins around, except for one.. which was in some way special, but i don't remember how. :p

[cfoley]

Another problem with gold currency is that people shaved the edges off, used the coin at its full value and then sold the shavings. This is the reason for milled edges on coins. You could tell when they had been tampered with!

The current UK situation with copper coins is interesting. I heard of a journalist getting loads of 2p coins, taking the ferry to France and selling them as scrap metal. She ended up making a loss due to transport costs but if you took a lot over...

Actually, that would be a bit impractical. Copper coins were only produced before 1992 (the mint sets from 1992 also include copper 1p and 2p) and while they aren't rare, they are certainly in a minority. If you go to a bank, most of the coins you get will be from the last couple of years.

The pound in it's decimal form was introduced in 1968 with the 5p and 10p replacing the shilling and florin at the same values. By 1971, we had 1/2p, 1p, 2p and 50p.

Note that there wasn't a £1 coin. This amount of money was of such value that it was only available in note form. By 1983, inflation had eaten away at the value of the pound so much that £1 coins were produced (notes were being worn out too quickly). 1983 was also the last year for 1/2p coins. Now the value of the pound has dropped so much that we also have £2 coins.

I mentioned that the 1/2p coin was dropped. This is quite a common practice. In France, the lower values of the centime had been dropped prior to the adoption of the Euro.

Europe is no stranger to currency change. A lot of the time this is because the current currency has been devalued too much. Sometimes, this results in a new currency of the same name and other times a currency of another country is used. The US Dollar is quite popular as was the German Mark. I went travelling round Eastern Europe in the Summer and took US dollars and GB pounds with me. The locals prefer these over their own currencies because they are far more stable.

One of the countries I visited on this trip was Serbia. The coins here (and in the rest of the countries that made up Yugoslavia) contain a record of the different states the area has belonged to.

[Kheturus]

I think there is interesting discussion in non-monetary currency.

For example, airmiles are by many respects a currency. They are widely available and there are lots of them. They are quite liquid and you can purchase them and sell them (albeit with high transaction costs). The same can be said for frequent-flyer points.

Consider McDonald's Big Mac. This hamburger is also very similar to a currency. The newspaper The Economist has had a "Big Mac" index (http://www.economist.com/markets/Bigmac/Index.cfm) for many years that is uses to judge the relative values of different currencies. How many Euros will a Big Mac cost you versus how many Yuen? If we consider the product to be the same in both countries (and McDonalds is famous for doing this) then the relative prices should indicate what the exchange is (sort of like using an American dollar).

Anyways, just some (fast) food for thought.

[M37]

Guys I know about the bretton woods system etc.. My point was more out of general intrest.
As for the change in currencies I I'm curions becuse we have had the Dollar here in Canda for over a century - before that we had the Canadian Pound - most people don't know this.

As for the end of the Gold Standard and stagflation of the leate 70's and early 80's I took that in Political Economy. My point about the gold currency is to wonder when gold pience themselves stopped bein used - Sohow the argument of thier not being enough phisical gold seems to not make sense if we consider the adavance in technology in the last few centuries.

As for the future will we see a South american, Asian, Middle easeteren economic blocks form along EU lines? I don't know but It would be intresting to find out.

As for asking why we use paper/ bits of metal for currency I know the reason - - its essentlay be cuse 1 it is easier than carrying produce/livestock and 2. becuse society says that paper and bits of coin are the accepted currency.

As for the most expensive currency I was just wondering if anyone knew of any thing that could be more expensive than the British pound.

As for compartive prices - well I don't know but a litre of OJ is 4.00 and a pocket novel is 10.00 and a Company of Heros is currently $50 + tax or $60 + tax for the collectors edition.
Anyone want to offer compairsons on everyday objects to see if 5 pounds or 7 Euros is worth more due to comparative price?

[HunterX]

While I can't answer that last question you just asked M37, I can tell you one thing, the US dollar is worth less in NYC than in the rest of the country. The cost of living in NYC is such that $1 (in the rest of the country) = $.75 (in NYC) give or take. NYC residents pay the highest combination of tax (income, sales, inheritence, dividend, etc.) and insurance rates than any where else in the country (keep in mind that individual rates may infact be lower, but the combination of all rates is the highest), housing rates are absolutely odscene, and even just basic living costs are higher than most of the country.A nice article on the subject (http://nymag.com/guides/money/2006/23462/index.html)

Khet: What about other rewards points? While they usually aren't transferable they are used for the aquisition of goods and services.

[n0z3k1ll3r]

Regarding denominations, I'm something of a fanboy of base 60. It's divisible by 1, 2, 3, 4, 5, and 6, which makes divisions a lot easier in a lot of cases. Base 10 (which we use for most things) is comparatively bad (can't divide by 3 or 6 at all, or by 4 to leave a whole number). So I'd personally say 1 dollar = 60 cents would be best.

Incidentally that divisibility is why 60 is used for a few things, such as time (1 hour = 60 minutes. 1 minute = 60 seconds), and angles (360 degrees = 6 x 60).

[Brian]

Got used to Euros fairly handy, a bit off putting for the first month or two. But like going into a different time zone, you just adapt. :2cents:

[darkelf]

Here in Norway, we have recently (some 10-15 years ago) stopped using the 10 ear (yes, we actually call our version of cents øre, or ear(s) in English). IIRC that was because it was just a hassle since the Norwegian crowns had decreased in value for some time and we didn't have much use for anything less that half a crown. Back in the 40s and 50s 10 ears were a lot of money, a newspaper was only a few ears.

We haven't started using euros yet and I don't think we will for some time yet (at least not until we join the EU, which we may or may not do). And do not want to change to euro, unless I get my money exchanged at a 1:1 rate (the current rate it's 1 Euro : 8,something Crowns).

[M37]

I wonder do older people from the EU still refer to the money by its old name?
I'm just wondering becuse I rember once when a Bristh lady here got up at our church to read the bulitin and said the cost was five pounds for a meal and fifteen for a family Insted of dollars. Everyone was a little surpised but we all chuckled. The thing is I don''t think she ever noticed. :D Oh well she is a nice lady I just thing she was reading fast and automaticly said pounds. - Anyone know if five pounds for a meal sounds right?

[jon_the_d]

a meal where?

5 pounds could get you a cheapish meal....macdonalds or a little caf, maybe a pub.

as for denominations. havingpounds and pence or dollars and cents doesn't appeal to me. I like the japanese way. just have one denomination, and never get any where near needing to go into fractions of it.

its effectively the same as any other system, just moved the decimal point well out of the way. I mean really, why bother with decimals, and different denominations?

[theBlind]

My grandmother still refers to euro as mark sometimes, especially when distracted by something else.
Personally, I've completely made the metal switch, the only leftover of the deutsche mark I have is a 1-Mark coin that I use to unlock the locks on shopping cards in the supermarket. It's both an object of remembrance and a reminder that, simply because the shopping card says that I need a 1euro or 50 cent coin for it, does not mean that this is the entire truth.

[Eboli]

As for the most expensive currency I was just wondering if anyone knew of any thing that could be more expensive than the British pound.

You got that from my post right?