Money is a good servant, but a bad master

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The Meaning of Money

The American Federal Reserve System of Federal Reserve Banks is one of the government institutions that attempts to control inflation so that we Americans will continue to accept our money as having value. According to the Federal Reserve Bank of Minneapolis, money has three functions:

1. it’s a medium of exchange. We accept coins and currency in return for goods and services.

2. it’s a standard of value. We can use it to determine the value of a good or service.  For example, a computer selling at $2500 has a value 2 1/2 times what one selling at $1000 would have.

3. it’s a store of value. We can save our money and spend it for something we want in the future. [Reference: http://library.thinkquest.org/28718/history.html%5D

The History of Money

The history of money begins around 2500 years ago with the first minting of coinage in about the seventh to sixth century BC. Money is any clearly identifiable object of value that is generally accepted as payment for goods and services and repayment of debts within a market or which is legal tender within a country.

Since ancient times people have swapped items of value either in the exchange of gifts or else in markets where a commonly shared system of tokens is more convenient.

Many things have been exchanged in markets including, for example, livestock and sacks of cereal grain (from which the Shekel is derived) – things directly useful in themselves, but also sometimes merely attractive items such as cowry shells or beads were exchanged for more useful commodities. Precious metals from which early coins were made fall into this second category. [Reference: http://en.wikipedia.org/wiki/History_of_money%5D

Barter

The first people didn’t buy goods from other people with money. They used barter. Barter is the exchange of personal possessions of value for other goods that you want. This kind of exchange started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock was often used as a unit of exchange. Later, as agriculture developed, people used crops for barter. For example, I could ask another farmer to trade a pound of apples for a pound of bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The cowry has served as money throughout history even to the middle of this century.

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be thought of as the original development of metal currency. In addition, tools made of metal, like knives and spades, were also used in China as money.  From these models, we developed today’s round coins that we use daily. The Chinese coins were usually made out of base metals which had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the appearance of today and were imprinted with numerous gods and emperors to mark their value. These coins were first shown in Lydia, or Turkey, during this time, but the methods were used over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman empires. Not like Chinese coins, which relied on base metals, these new coins were composed from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the beginning of a kind of paper money.

Noses

During the ninth century A.D., the Danes in Ireland had an expression “To pay through the nose.” It comes from the practice of cutting the noses of those who were careless in paying the Danish poll tax.

Paper Currency

From the ninth century to the fifteenth century A.D., in China, the first actual paper currency was used as money. Through this period the amount of currency skyrocketed causing severe inflation. Unfortunately, in 1455 the use of the currency vanished from China. European civilization still would not have paper currency for many years.

Potlach

In 1500, North American Indians engaged in potlach, a term that describes the exchange of gifts at banquets, dances, and various rituals. Since the trading of gifts was so important in figuring the leaders’ community status, potlach went out of control as the gifts became more extravagant in an effort to surpass others’ gifts.

Wampum

In 1535, though likely well before this earliest recorded date, strings of beads made from clam shells, called wampum, are used by North American Indians as money. Wampum means white, the color of the clam shells and the beads.

Gold Standard

In 1816, England made gold a benchmark of value. This meant that the value of currency was pegged to a certain number of ounces of gold. This would help to prevent inflation of currency. The U.S. went on the gold standard in 1900.

Depression

Because of the depression of the 1930’s, the U.S. began a world wide movement to end tying currency to gold. Today, few nations tie the value of their currency to the price of gold. Other government and financial institutions now try to control inflation.

Today

At present, nations continue to change their currencies. For example, the U.S. has already changed its $100 and $20 banknotes. More changes are in the works.

Tomorrow

Tomorrow is already here. Electronic money (or digital cash) is already being exchanged over the Internet.

Reference: http://library.thinkquest.org/28718/history.html?tql-iframe

Why do we use money?

We use money as payment for goods or services. Today people use coins, banknotes (bills), checks, credit cards, and debit cards (the cards used at automatic teller machines, or ATMs) to pay for things. Before money was invented, you could only get something from another person by bartering or trading something else for it. It was hard to make even trades and the deal had to be made on the spot. The introduction of money offered people greater flexibility when trying to get goods or services: it made it possible to put standard values on things, and money could be saved and used for future purchases. [Reference: http://www.answers.com/topic/why-do-we-use-money#ixzz2UXjTicdl%5D

Money Wears Out

It doesn’t take long for money to wear out. In fact, money can wear out in as little as 15 months. The Federal Reserve Bank of Atlanta shows the approximate life of paper currency denominations and coins.  A table based on its information follows:

Denomination

Length of Time

$1.00

18 months

$10.00

18 months

$5.00

15 months

$20.00

2 years

$50.00

5 years

$100.00

8 1/2 years

Coin

25 years

Commercial banks send worn-out notes to a Federal Reserve Bank to be replaced. Then, the Reserve Banks sort the money they get and decide whether or not it can be reused. If it can be, they put it in vaults until it recirculates again through the commercial banks. Reserve Banks then burn the unusable paper money and return the damaged coins to the U.S. Treasury.

Bhaktapur – A city of festivals and celebrations

Bhaktpur is an ancient Newar town in the east corner of the Kathmandu Valley, Nepal. Many people who go to Kathmandu miss this place. But I would really recommend to visit this 1427 A.D. town that is rich in culture and gives you a feel of the life style at that time. It is called a city of festivals because here people celebrate festivals each month starting from new year to the end of the year.

I would love to live at this place but I only had a day to visit this beautiful enchanting place so I would love to share the pics of this place for your pleasure. I hope it will provide you a window to seek into the past and dream about the life at that era on this part of Earth.

Let's take the journey through the magical world of Bhaktapur

Let’s take the journey through the magical world of Bhaktapur

One regular day in the life of the people living in Bhaktapur

One regular day in the life of the people living in Bhaktapur

 

 

House with a lot of stories to tell

House with a lot of stories to tell

 

People gathered to play cards - Simple life

People gathered to play cards – Simple life

 

Walls older than few hundreds of generations

Walls older than few hundreds of generations

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Temple can be a place to hang out as well

Temple can be a place to hang out as well

 

Lets take a look at the other places now - I love the narrow lanes here as well

Lets take a look at the other places now – I love the narrow lanes here as well

 

Symbol of the security at the door of Kingdom

Symbol of the security at the door of Kingdom

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Temple

Temple

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History speaks through these houses

History speaks through these houses

 

Thinking about the life they have lived and enjoying the evening

Thinking about the life they have lived and enjoying the evening

 

Plenty of space to play

Plenty of space to play

 

 

 

Window to the soul

Window to the soul

 

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Other ways of entertainment we miss in the modern world today

Other ways of entertainment we miss in the modern world today

Looking into life

Looking into life

Old but gold

Old but gold

Colorful houses

Colorful houses

Beautiful isn't it...I can't imagine how creative the people were at that time and how much effort they put into making something like this a reality

Beautiful isn’t it…I can’t imagine how creative the people were at that time and how much effort they put into making something like this a reality

Do you want to go up there?

Do you want to go up there?

Did I just disturbed somebody at lunch time?

Did I just disturbed somebody at lunch time?

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Lord Shiva

Lord Shiva

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Sky high Tower

Sky high Tower

That the way you feel in here...all colorful and cheerful

That the way you feel in here…all colorful and cheerful

Wo...some of them were creative in a bit scary way I felt...what do you think??

Wo…some of them were creative in a bit scary way I felt…what do you think??

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Welcome

Welcome

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Lord Ganesha ...just in a different role here

Lord Ganesha …just in a different role here

Would you like to decorate your house with these?

Would you like to decorate your house with these?

High as sky

High as sky

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Gallery of amazing things

Gallery of amazing things

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That's the main square now

That’s the main square now

Love these pieces of art, used to fill water in old times, and here still are

Love these pieces of art, used to fill water in old times, and here still are

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