Metallism is the economic principle that money derives its value from the purchasing power of the commodity upon which it is based. The currency in a metallist monetary system may be made from the commodity itself (commodity money) or use tokens such as national banknotes redeemable in that commodity. The term was coined by Georg Friedrich Knapp to describe monetary systems using coin minted in silver, gold or other metals. In metallist economic theory, the value of the currency derives from the market value of the commodity upon which it is based independent of its monetary role. Carl Menger theorized money came about when buyers and sellers in a market agreed on a common commodity as a medium of exchange in order to reduce the costs of barter. The intrinsic value of that commodity must be sufficient to make it highly “saleable”, or readily accepted as payment. In this system buyers and sellers of real goods and services establish the medium of exchange, not a sovereign state. Metallists view the state's role in the minting or official stamping of coins as one of authenticating the quality and quantity of metal used in making the coin. Knapp distinguished metallism from chartalism (or antimetallism), a monetary system in which the state has monopoly power over its own currency and creates a unique market and demand for that currency by imposing taxes or other such legally enforceable debts upon its people which can only be paid in that currency. Joseph Schumpeter distinguished between "theoretical" and "practical" metallism. Schumpeter categorized the Munger position, that a commodity link is essential to understanding the origins and nature of money, as "theoretical metallism". He defined "practical metallism" as the theory that although a sovereign state has unfettered power to create non-backed currencies, money with no intrinsic or redeemable commodity value, it is more prudent to adopt a backed currency system. http://en.wikipedia.org/wiki/Metallism Silver, in the form of electrum (a gold–silver alloy), was coined to produce money around 700 BC by the Lydians. Later, silver was refined and coined in its pure form. Many nations used silver as the basic unit of monetary value. In the modern world, silver bullion has the ISO currency code XAG. The name of the pound sterling (£) reflects the fact it originally represented the value of one pound Tower weight of sterling silver; other historical currencies, such as the French livre, have similar etymologies. During the 19th century, the bimetallism that prevailed in most countries was undermined by the discovery of large deposits of silver in the Americas; fearing a sharp decrease in the value of silver and thus the currency, most states switched to a gold standard by 1900. In some languages, such as Sanskrit, Spanish, French, and Hebrew, the same word means both silver and money. The 20th century saw a gradual movement to fiat currency, with most of the world monetary system losing its link to precious metals after Richard Nixon took the United States dollar off the gold standard in 1971; the last currency backed by gold was the Swiss franc, which became a pure fiat currency on 1 May 2000. During this same period, silver gradually ceased to be used in circulating coins. In 1964, the United States stopped minting their silver dime and quarter. They minted their last circulating silver coin in 1970 in its 40% half-dollar.[21] In 1968, Canada minted their last circulating silver coins which were the 50% dime and the 50% quarter. The Royal Canadian Mint still makes many collectible silver coins with various dollar denominations. In addition to Canada, the United States and many other countries continue to mint silver coins that are collected for their bullion and numismatic value. The U.S. coin is known as the "Silver Eagle". Silver is used as a currency by many individuals, and is legal tender in the US state of Utah.[22] Silver coins and bullion are also used as an investment to guard against inflation and devaluation. http://en.wikipedia.org/wiki/Silver
Visibility: 1453
Duration: 36m 50s
Rating: 19