History

The First Representative Form of Money | Armstrong Economics

Posted on by johnbarleycorn12

QUESTION: Mr. Armstrong; I was discussing the history of money with a professor at our university where they have a display of coins. I asked why were there no Egyptian coins. He referred me to your site and said that you are the expert in the world monetary system. I read your piece on the Egyptian deben monetary system. The Egyptians began with a representative money rather than coins. Is this the oldest civilization with pyramids and paper money? JY ANSWER: From a monetary perspective, the Egyptian monetary system is by far the first representative form of money. In other words, they used a derivative of paper money proving that money also need not be tangible as has been the case in modern times. The central element of any monetary system hinges upon whatever the people “believe” has value. In Egypt, gold was seen as the tears of god and was reserved EXCLUSIVELY for royalty. Gold did not serve as any sort of medium of exchange until about 700 BC. Why? For anything to serve as the medium of exchange it must exist in sufficient quantity. As long as gold was rare, it was exclusively the property of kings and represented a luxury with no PRACTICAL value whatsoever. Egypt’s monetary system began with barter. It was primarily based on agriculture – grain. This evolved into official Graineries and a farmer would then take his crop to the Grainery and receive a receipt. With time, the monetary system evolved where people would then accept these receipts (paper money) in payment. The huge difference between Egypt and Mesopotamia can be seen through the monetary system. The earliest use of metal appears to be in Mesopotamia cast in the form of silver rings. In ancient Egypt, silver was probably more expensive than gold which was rather common after the exploitation of the Numbian mines. Evidence supporting this idea comes from a New Kingdom Period wall painting depicting a man weighing big gold rings which were discovered in Thebes. This is the Deben Monetary System. Eventually, gold rings became customary to carry out trade with the outside world. So we tend to find the beginning of a two-tier monetary system using grain receipts for local small transactions and gold rings for international payments of a higher monetary value. We see this type of two-tier monetary system throughout the ancient world right into modern times. Ancient Athenian Decadrachms are traditionally discovered around the Mediterranean seaport rather than in Greece reflecting they were high denominations used in international trade. Bretton Woods used gold dor international payments and paper money for domestic US transactions when gold was illegal for citizens to possess. The two-tier monetary system lasted in modern times up until August 1971. To make trade between Phoenicia and Mesopotamia easier they created a system that could have been based on the traditional Egyptian measurement known as deben that was equal to about 86 grams, which would exchange for 12 shekels used by Babylon and Phoenicia of about 7.2 grams per unit. Pictured here is a dishekel of the Phoenician city of Tyre, which is believed to be the earliest known coin circa 450-425BC. The date of the first Phoenician coins is uncertain. The earliest date generally accepted by scholars is about 450 BC and initially, the coins were all silver with weights based on variations of the Babylonian shekel of 7.2 grams. The most interesting aspect is that Phoenicia possessed no precious metal mines. The source of their silver came from trade with distant mines in Spain and possibly Sardinia. The motif is that of a dolphin riding the waves and the reverse with the wisdom of the owl. Now, just to address your comment that Egypt has the oldest pyramids, that is an incorrect statement. Caral has the distinction of being the oldest known city in the Americas and one of the oldest in the world. In fact, the Caral Pyramids were built approximately 5,000 years ago and they are actually OLDER than the Egyptian pyramids by around 100 years. They predate the Inca Pyramids by some 4000 years. Like other pyramids in history, the Caral pyramids are believed to have religious significance. There are six total pyramids. The Norte Chico civilization flourished between the 4th and 2nd centuries BC. It appears to have been simply a barter civilization, yet there are many mysteries yet to be solved. For instance, there remain some very curious questions unanswered such as why are there no surviving evidence of ceramics? They appear to have used gourds instead of ceramics. Gourds may be good for storage and drinking or eating, but would not function as pots for cooking. There appears to also be missing any evidence of agriculture so it is possible they never eat bread. We do know that they used blue whale vertebrae as stools suggesting that they lived off the sea. It is entirely possible that they eat fish raw like the Japanese. On some of the gourds, figures have been discovered which may represent a deity. Very few have survived but they may represent some form of a god reflecting a religious belief system that appears to be common to all civilizations. There is also no sign of significant surviving art perhaps because they were made from organic material, which did not survive.
— Read on www.armstrongeconomics.com/history/ancient-economies/the-first-representative-form-of-money/

Lessons of the Afgantsy for the Syrians

Posted on by johnbarleycorn12

Ahmad Shah Massoud demonstrated his genius for analysis by insisting that a war never ends by one side declaring victory but by one side admitting defeat. The Soviet experience in Afghanistan is not the sole example of winning a war in military terms but
— Read on www.gatestoneinstitute.org/12225/russia-syria-quagmire

1989: A Tale of Three Cities & the End of the Old New World Order – The Imaginative Conservative

Posted on by johnbarleycorn12

The year 1989 may well be seen by future historians as one of those rare pivotal years of this past millennium—like 1066, 1492, 1793, and 1914—that profoundly altered the direction of Western Civilization… (essay by Joseph Mussomeli)
— Read on www.theimaginativeconservative.org/2018/04/1989-tale-three-cities-end-old-new-world-order-joseph-mussomeli.html

Money Supply of Rome & Traditions | Armstrong Economics

Posted on by johnbarleycorn12

QUESTION: I found your article on the theory of money supply is not the source of inflation very fascinating. I was taken back by the fact that there were moneyers who signed the coins for their term each year as we still do today. Are there any other traditions from Rome that we still maintain with respect to money? PF ANSWER: That is an actually a good question for it demonstrates how traditions lose the purpose for what they were originally introduced as a solution. You will notice that some pennies or quarters, for example, have mint marks. There will be no mint mark reflecting it was coined in Philadelphia, “D” for Denver, and “S” for San Francisco. The Denver Mint was established to process the silver finds in Colorado and San Francisco was established because of the California Gold Rush. Those events are long since past but the mints still remain. Mints were also established in New Orleans (O) and Carson City Nevada (CC). They were closed after the roaring bullion days. There were forgeries of coins in the precious metals as well as bronze just about as soon as coins were invented. When you look at the counterfeits that were being made in the outer regions surrounding the Roman Empire, we can easily distinguish such forgeries based upon style looking at the bronze Dupondius of Claudius (41-54AD). The forgers obviously lacked people with talent to copy the dies. Now, look at the silver denarius forgery. Here the style is professional. Such forgeries are made from bronze and silver plated. They are called Fourrée Denarii being plated in silver. The dies are professional. Because these are known throughout the entire run of Roman coins, it is believed that this high level of quality was probably “officially” produced in the various mints. It is most likely that they were frauds by the mint staff rather than officially sanctioned. When Government No Longer Accepts Its Own Money Despite the fact that the Emperor Valentinian I (364-375 AD) faced constant frontier wars, he addressed the finances of the Empire head-on. In 366 AD, Valentinian carried out an important reform of the tax-collection system which was enacted whereby payments to the Imperial Treasury would no longer be made in coin but in refined bullion. All coins were to be melted down and refined being poured in the form of officially certified gold and silver bars as pictured here. Taxes were to be paid in bullion and not coin to ensure the highest metal content. Effectively, the government would no longer accept its own coinage as legal tender. The existing coinage was melted down as a necessity because of the quality of the metal content and the underweight of the coinage in addition to the pervasive counterfeit coinage in circulation, undermined the confidence in the circulating currency. Additionally, some mints were engaged in outright fraud as mentioned above. Mint staff had become very corrupt by this point in time during the 4th century and the problem was so acute that the anonymous author of the “De Rebus Bellicis”, which was a work that suggested remedies for the military and financial problems in the Roman Empire at that junction in history, recommended action against the mint staff. This work recommended isolating all the monetary staff producing coinage and prosecuting them for their frauds. The new system of melting down the coinage introduced by Valentinian I ensured that the treasury was refilled with the added advantage of restoring both the public and foreign confidence in the precious metal coinage once again. New arrangements were also put in place for the making of gold and silver denominations under the control of the Emperor. Previously, this had been in the hands of the various mintmasters. Valentinian’s reform was aimed at limiting the activities of the mint staff to the production of base metal coinage while gold and silver denominations were to become the prerogatives of potentially mobile minting establishments operating in the environments of the Imperial palaces where ever the Emperor happened to be in residence. Rome during the 3rd century introduced mint marks to keep track of what coins were produced from what mint. In this way, they were able to identify any mint that was cheating the people. Aurelian (270275AD) returned to Rome in 271 AD, where he had to pacify a terrified city. He immediately halted the rioting and restored order to the capital. The controller of the mint in Rome began a rebellion over the monetary reforms laid out by Aurelian. He ordered that all the debased currency be purchased back and replaced with a new currency of higher content in silver. The rebellion was led by Felicissimus. It appears that those who had been running the mint were embezzling the intended silver and issuing the debased coinage at least in part on their own authority. Obviously, any reform to the monetary system that called for an increase in silver content would have been unprofitable for those running the mint for personal gain. In the rebellion, as many as 7,000 soldiers died when Aurelian was forced to trap and execute them and their allies, some of the senatorial rank, in a terrible battle on the Caelian Hills. Now that is what you call monetary reform! Currently, the advantage of paper money is that there are far fewer counterfeits in circulation today compared to Rome during the 4th century AD. The emperor who followed Valentinian I was still facing problems with the currency. Here is an Æ Exagium which is a Solidi Weight (20mm, 3.57 grams) for testing gold coins issued under Theodosius I. Clearly, the idea of a gold standard was not all that it was cracked up to be. Counterfeits were always a problem in addition to clipping and shaving the coinage to lighten the weight. They often say the more things change, the more they remain the same. Some artists who were proud of their work signed the dies for coins. We find the artist who created the Lincoln penny signed the die in 1909 engraving his initials V.D.B. as did the artist Kimon in ancient Sicily on the Decadrachms of Syracuse during the 4th/5th century BC engraving his initials “KI” on the headband.
— Read on www.armstrongeconomics.com/world-news/monetary-reform/money-supply-of-rome/