Unless you live on a desert island, you could not survive in the modern world without money - though I'm sure it may have crossed your mind once or twice to escape the rat race. Ignoring for now that thought, you should perhaps consider that money has made it possible to develop society and improve the quality of life.
Although we'd all like to go native from time to time (and do our level best to emulate that happy state during the annual holiday) the reality is that we want our televisions and cars. We want our modern houses and the conveniences that come with them. In fact, many of us would not know how to cope without them. So make the most of it. Learn how to earn money and spend money wisely. If you are lucky and live in a caring society, the state (your government) should have made a level playing field to give everyone the chance to enjoy modern living. If not, vote them out and get a new bunch that understand the needs of the people.
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International Accumulation of Foreign Reserve currencies
Money has developed over the years from the likes of conch shells to being managed by complex international banking systems.
The history of money has generally seen commodity money replaced by more formal systems, as money has been progressively brought under the control of governments.
In economics, there are various definitions for money, though it is now commonly considered to be any good or token that fulfills the money functions: to be a medium of exchange, store of value, and unit of account. Some authors explicitly require money to be a standard of deferred payment, too. In common usage, money refers more specifically to currency, particularly the many circulating currencies with legal tender status; deposit accounts denominated in such currencies are also considered part of the money supply.
The use of money provides an alternative to bartering, which is often inefficient because it requires a coincidence of wants between traders. The emergence of some form of money is a natural market phenomenon observed repeatedly across civilizations and is not dependent on any central authority or government. Indeed, the division of labour in any but the most basic of forms cannot occur without it.
Commodity money was amongst the earliest forms of money to emerge. Under a commodity money system, the object used as money has inherent value. It is usually adopted to simplify transactions in a barter economy; thus it functions first as a medium of exchange. It quickly begins functioning as a store of value, since holders of perishable goods can easily convert them into durable money. In modern economies, commodity money has also been used as a unit of account. Gold-backed currency notes are a common derivative form of commodity money.
To function as money, the monetary item should possess a number of features:
To be a medium of exchange:
To be a unit of account:
To be a store of value:
To be anonymous:
For these reasons, gold and silver have been chosen again and again throughout history as money in more societies and in more cultures and over longer time periods than any other items. Although, diamonds are used as an international arms currency.
One key benefit of these features of money is that it facilitates and encourages trade; because barter is inefficient.
Modern forms of money
Banknotes (also known as paper money) and coins are the most liquid forms of tangible money and are commonly used for small person-to-person transactions. Today, gold is commonly used as a store of value, but is not directly used as a medium of exchange and thus is no longer a form of money.
There are also less tangible forms of money, which nevertheless serve the same functions as money. Checks, debit cards and wire transfers are used as means to more easily transfer larger amounts of money between bank accounts. Electronic money is an entirely non-physical currency that is traded and used over the internet.
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