We normally think of currency when we think of money. However, more generally speaking, money is any commodity which satisfies the following: Unit of account Store of Value Medium of exchange

Until around 3000BC, commodities such as livestock and grain were used as money for many societies

The Chinese began using cowries as money

By 1000 BC, tool currencies were adopted. These were miniature metal models of spades, hoes, blades, etc.

The Lydian King Croesus created the first true coin.

Medieval coinage was standardized by Charlemagne when he conquered most of Europe around 800AD

Due to a severe copper shortage, the Chinese begin issuing paper currency. Frequent reissues fuel inflation

King Henry issued the first Tally Sticks in 1100AD. This practice lasted in England for over 700 years!

In the 1660s, goldsmiths notes are accepted as evidence of ability to pay. These notes mark the first use of Banknotes in England.

The colony of Massachusetts was the first colony to issue paper currency in the US

To finance the Revolutionary War, the congress issued Continentals. Due to oversupply, they rapidly became worthless

The First bank of the US was chartered in 1789 by Alexander Hamilton

The Second Bank of the US was founded in Its charter renewal was vetoed by Andrew Jackson in 1836

During the free banking era, virtually anyone could open a bank and issue notes.

By 1860, it is estimated that up to 8,000 different notes were in circulation with varying degrees of backing. An estimated 60% of all banknotes were counterfeit

National Banks Chartered and supervised by OCC Could issue national currency State Banks Controlled by State Regulatory authorities Restricted from issuing national currency

Under the National Banking Act, notes were printed by the US Treasury. National banks were required to purchase US government bonds as backing for the notes. State bank notes were taxed at 10% and were soon driven out of circulation.

The Federal Government issued greenbacks which were declared legal tender.

In an effort to increase precious metal reserves, the government began issuing gold and silver certificates in 1863

Silver certificates continued to be issued until the 1960s when the price of silver jumped to $1.29

The role of the Fed is to control the supply of currency, as well as regulate the banking system

In order to deal with the banking crisis, FDR orders US citizens (as well as the Fed) to surrender all gold coins, bullion, and certificates to the US Treasury

Ownership of gold by US citizens was illegal until the law was repealed in 1974!

On August 15, 1971, Nixon closes the gold window and the US dollar ceases to be convertible into gold. This marks the beginning of the current anchorless system.

Digital currency (digital money or electronic money or electronic currency) - is a type of currency available only in digital form, not in physical (such as banknotes and coins). It exhibits properties similar to physical currencies, but allows for instantaneous transactions and borderless transfer-of-ownership.

Into the unknown (not that we ever understood anything very well) Deep Thoughts by Ms. Morton-- 21 st Economics will be a wild ride (better you than me)