Monday, September 3, 2007

The History of Money

My own history of money starts back when I was six and one of my older friends started a shoeshine service for the military housing complex we lived in. For 10 cents, we would pick-up the shoes, take them to a central location, his backyard, and clean and spit-shine the lot. After which, he would deliver them and collect the money. Each of us workers made 4 cents a pair. So early on I learned to earn my money and work independently.

Apparently, the first use of paper money was in China. During the Chinese Song Dynasty (AD 960-1279) not only did the government produce the world's first known paper-printed money, or banknote (see Jiaozi and Huizi), but paper money bestowed as gifts to deserving government officials were wrapped in special paper envelopes. I guess we have a lot to thank the Chinese for beside spaghetti.

Another interesting aspect of money is how it grew from being something of value, like gold, silver, diamonds, to represent something of value. This aspect of money and, of course the banks that hoard it, is explained more than well in this essay by John Maudlin called the Leverage of Money. I came upon him when I was researching the preachings of our current money gurus Robert Kiyosaki and Donald Trump. Keep your money moving, working, earning and we will all be all right they say. Do you suppose that's what President Bush is thinking as he tries to resolve the sub-prime lending disaster?

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