The History Of Money: Why Gold And Silver Bullion Are A Solid Choice
Paper currency is the most common form of money today. However, in terms of history, gold coins, silver coins and bullion have been used as currency much longer. These forms of currency also tend to be more reliable since they aren’t as susceptible to inflation and deflation. The earliest form of trade for goods and services was barter. The actual exchange of money dates to Mesopotamian civilization.
Silver was first discovered around 3000 BC in and around Greece. China became the first country to use a metallic silver standard with silver bullion as a form of currency. Silver as currency spread throughout Europe with the discovery of vast amounts of the substance in newly explored lands. The regions of Bolivia, Peru and Mexico provided approximately 85% of the world’s silver used for currency for a period of 300 years from 1500 through 1800.
Silver coins played a key role in the early history of the United States. In 1785, the silver standard was adopted by the U.S. with silver used for all coinage through 1965. In 1792, Congress decided to base the country’s currency on the silver dollar in reference to its relationship with the value of gold.
Gold coins date back to the 6th century BC in what is now Western Turkey. They were fashioned from gold deposits in local rivers. Gold as currency played an important part in Greek and Roman civilizations, forming the basis for the creation of the modern banking system. New mines discovered in Hungary after 1300 soon made gold currency available throughout Europe.
As with silver, discovery of lands in the new world added to gold supplies. In the United States, a gold rush in the late 1800s added to the allure of gold, even enticing westward expansion as individuals went in search of riches in uncharted territories. After 1900, many nations around the world adopted the gold standard as a way to back their currencies. In 1933, the Great Depression brought an end to the popularity of gold used for coins, as the government officially recalled such coinage.
All major currencies in use throughout the world today are considered fiat money, meaning currency not backed by other reserves or another currency source. Examples of this are the dollar and the Euro. The U.S. abandoned the gold standard in 1971, leading to varying degrees of inflation and deflation. In other words, paper money can be printed without anything to back it up.
Recent global economic concerns have lead more people to turn to gold and silver coins and bullion. Today the sale of silver and gold coins, along with American Silver Eagle coins are a popular commodity around the world. The main draw of these coins is the fact that they are more reliable than paper currency. The value of gold and silver has increased in recent years as paper currency has become more unstable, fluctuating with economic conditions. Gold and silver are more resilient to such factors.