History of gold and silver coins
The main trading center linking the East Asian kingdoms with the coastal Greek cities of Ionia was Sardis, the capital of ancient Lydia. So it was only natural that the first coins ever made would start here. Around 650 BC, as long as 10 years, lion head coins first appeared and were used as the first bimetallic currency system. These early coins were made of a metal called electrum, an uneven mixture of gold and silver, and sometimes had small traces of copper or other metals.
In Lydia, the most used coins were minted with a weight of 4.76 grams, called trites and valued at 1/3 of a stater. Three of these coins weighed about 14.1 grams and are equivalent to one stater. A stater is about a month’s pay for a soldier. Coins the size of a state were also minted, as well as smaller fractions: the trite 1/3, the aforementioned coin, the hekte 1/6, 1/12, 1/24, 1/48 and up to 1/96 of a stater. .
It didn’t take long for the Greek cities of Ionia to start using electrum to start making their own coins. However, widespread trade in coins made from electrum was somewhat hampered. Because of the uneven mixture of gold and silver, it was quite difficult to determine the exact value of each coin. For this reason, a foreign merchant would offer very low undervalued rates on local electrum coins. By 570 BC, pure silver coinage was introduced in parts of Greece, making these difficulties less and less of a problem.
Around 560 BC, the Lydians devised a process to separate gold from silver, leading to the minting of the first gold coins. Gold coins were now produced alongside silver coins. Electrum coins remained a fairly popular form of currency until around 350 BC. However, gold and silver coins quickly became the world standard for currency used in trade. What helped achieve this so quickly was in 547 BC, when after a 13-day siege the Persians scaled a lightly defended part of the wall and captured the city of Sardis. Cyrus, amazed at the gold coins found in the kingdom of Lydia, decided that he wanted to make these gold coins for himself. The Persians learned to mint gold coins and began to use them for trade.
The Greeks liked the use of silver coins as currency and helped make silver coins except as the world standard for currency. Unlike the Greeks, the Persians preferred gold coins to silver, and they helped make gold coins except as the world standard for currency. Between the two, gold and silver coins become the money excepted throughout the known world. Since then, gold and silver coins have been the only real form of money to this day.
At this point you might be saying what about the paper dollars, yen or euros in my pocket? Around 100 AD, the Chinese were the first to invent paper. At some point in the early 7th century they also became the first to invent paper money. This paper money was called flying money. These early bank notes carried a collateral that could be traded at any time for currency. Paper was not the real money, but the coins you could trade for, that’s why it was the real money. Paper was just a form of promissory note, a promise to trade for real money.
In 1292, when Marco Polo returned from his travels in China and told the people about this paper money they used there, the people of Europe did not believe it. It seemed like a joke that the Chinese used paper for money. Paper money in Europe would not be produced until the 1600s. In the mid-1600s, paper money began to appear all over Europe, some accepted, some not. Goldsmith’s notes printed by the Bank of England founded in 1694, were again a type of promissory note. These notes were printed as a pledge by English goldsmiths for account deposits. The clause “(I) promise to pay the bearer on demand the sum of — pounds” in gold. Again, the paper was not the money, the gold that could be traded with was the money.
Article 1, Section 8, Paragraph 5 of the United States Constitution states that Congress has the power “To coin money, to regulate the value thereof and of foreign coins, and to fix the standard of weights and measures;”
Article 1, Section 10, Paragraph 1 of the United States Constitution states that “No State shall make a tender for the payment of debts of any thing but gold and silver coin.”
It is clear from these two sections of the United States Constitution that our founders did not want paper money as a form of tender in this country, and for good reason. They knew that gold and silver coins have and hold value, and paper always has problems. Many of our founders saw the problems Europe was having with its attempts to use paper money, as well as the early attempts of the colonies to use paper money.
In 1836, the first bank notes were printed, with over 30,000 designs and colors, which were easily counterfeited, along with bank failures, they became almost poison to most people. In 1861 Congress authorized the United States Treasury to issue paper money for the first time in the form of non-interest bearing Treasury notes called Demands. In 1862 these notes were replaced by United States notes. Commonly called Greenbacks. In 1865 gold certificates were issued. In 1868, National Bank notes were printed, backed by US government securities. In 1878 silver certificates were printed in exchange for silver dollars. In 1913 the Federal Reserve Act was passed, then everything changed.
Up to this point, printed paper money could be exchanged for gold or silver coins, real money. For a while, federal reserve notes could be, too. From 1913 to 1963, the Federal Reserve note went from a note that could be exchanged for real money to nothing more than a piece of paper that is backed by nothing, a debt instrument. Federal Reserve notes no longer say it is redeemable for gold or silver, it just says “This note is legal tender for all public and private debts.” In fact, the words legal tender no longer appear on the note.
Today’s Federal Reserve Note is what is called fiat currency. Fiat currency has no intrinsic value and no guarantee that it can be converted into gold or another currency. Fiat currency is nothing more than a government order (fiat) that must be accepted as a means of payment, without giving it back to anything. The founders of the United States knew this would happen if paper money were accepted. That’s why they made gold and silver coins the only legal form of money in our Constitution.
Paper money has never been and never will be real money. Gold and silver coins have been and still are the only real money. It is felt that gold and silver are increasing in value, when in reality it is paper money that is decreasing in value, meaning that more paper is needed to buy the same amount of gold. When quarters were still silver you could buy a loaf of bread with one of them. Today, that same quarter of silver would still buy you a loaf of bread.
Gold and silver coins are the safest place to invest your paper dollars. It’s the one thing you can invest in that will never break. Stocks and bonds can crash, paper money can lose value, banks can fail, but throughout history gold and silver retain value. It is well known that gold coins are the safest and risk-free place to invest your savings. As the news tells us about the failed economy, and we see the prices of everything go through the roof, we need to find a safe place to put our federal reserve notes. At the dollar’s rate of decay, if you can survive on $20,000.00 a year today, in about 10 years it will take you over $50,000.00 a year to live the same lifestyle. That same $20,000.00 in gold coins in 10 years will last more than one year.
Paper currencies do not offer you any protection in your investments, they just lose more and more value with each passing year. There is nothing that makes up for the decline in value of coins like gold coins. When you save gold and silver bullion coins, such as American Eagles, you build yourself a fortress of investment security.
#History #gold #silver #coins