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Money is a payment instrument specialist generally accepted by community members in settlement of a purchase, a benefit or a liability. It can perform three main functions:
Some authors consider that the ability to extinguish debts and obligations, including tax, is a fourth function called ‘legal tender’ currency. In practice, these functions can be performed by different currencies in circulation simultaneously.
A currency is characterized by its users’ confidence in its enduring value and its ability to serve as a medium of exchange. It therefore has social, political, psychological, legal and economic. In times of unrest, loss of trust, a currency of necessity may appear.
The currency has made in the history of the most diverse forms: beef, salt, pearl, amber, metal, paper, etc..After a very long period where gold and silver (and metals) were the preferred media, money is now almost entirely paperless and circulates largely in money or electronic forms.
Each currency is defined as the currency for a given currency area (usually a state). She takes the form of deposits, bank notes and coins, also known as coin. The currency traded between them in the international monetary system. De facto since 1973 when the exchange rates among major world currencies cease to be defended and de jure agreements after Jamaica in 1976, the currencies are not calibrated directly or indirectly by a weight of precious metal. Their relative values vary on an international currency market through a system of floating exchange expressed or flexible.
Because of the importance of money, states have early sought to ensure optimum monetary power, setting an official currency and that currency by making one of their symbols and a sign of their power. They have arrogated to themselves gradually across the monopoly of issuing banknotes and coins. They have control over money creation banks through legislation and monetary policy of central banks.
Fans and detractors of the currency
Fans
The swap function that allows the currency is the only guarantor of world peace and the end of conventional paper money, which means coin or could be the cause of new social conflicts without precedent. A return to safe haven currencies such as metallic gold and silver in this context appears inevitable.
Numismatists
Numismatists collect and study the circulating forms of currency (notes and coins).The numismatic research has allowed us to understand the emergence of money, their dissemination, technical production, handling. While the artistry and taste of the collection prevail, we must not overlook the contribution of numismatics in economic history. Investment in gold is also an act of precaution against currency devaluation and the risk of widespread bank failure.
Historians
The study of money allows historians and archaeologists to date sites, identify the succession plan, sizing and economic flows of the past, while clarifying the spheres of influence.
The Counterfeiters
It has long been punished by death. Everywhere, even today, the punishment of counterfeiting remains very high in the scale of penalties, similar to that incurred for a murder. Some notes which carried a time the promise of a refund eventually display only the penalties for counterfeiting.
The development of digital and color printing have created a new risk which has forced central banks to implement technology more and more complex to counter the temptations offered by the ease of photocopying tickets. The changeover to the euro has allowed Europe to eliminate cuts that had become too easy to imitate. The widespread among merchants of devices to detect counterfeit notes reflects the rise of counterfeiting.
Some theories suggest that left soldiers attacking the currency of a country could permanently undermine its foundations. We lent this intention to the Nazis and then the Soviet Union vis-à-vis the dollar. This fantasy has fueled a large literature but history does not include attempts have been if only the beginning of an effect. In contrast, extensively quotes the words of Keynes and Lenin explained that the best way to create the conditions for a revolution was to pervert the currency.
The detractors of the currency
The moral and religious convictions
Religions in general, focus on the spiritual and condemn the excessive importance given to the material world or the material world as a whole. Money, as a symbol and embodiment of the economy, supports the weight of this condemnation, without its utility is questioned (no major religion does not advocate a return to barter nor disapproves the exchange including in form of purchase).
However, without condemning the money itself, Christianity and Islam condemn the trade, that is to say, lending at interest (usury).
Social convictions
The social protest of money comes either from people who think that the extension of the monetary sphere has eroded the sphere of the gift they think is causing a decline of civilization or groups who feel that stress is a direct More immediately to obtain the distribution of wealth: requisition of empty housing, prohibition of stock options and golden parachutes, ‘take the money where it is ‘etc..
Many women prefer the West today, despite the pressure of tradition, the freedom that they can own a currency that is a guarantee of independence and freedom, self-sacrifice of a life without the right economic conditions.
More recent are the attempts that are placed in the sphere of trade and advocated a return to barter for better usability and delete what is presented as the disadvantages of the currency.
Ecological convictions
Concern for the future of the planet and the environmental concerns have developed a critical growth and its means. The money created by the credit instrument for growth, was thus put in the dock. To repay a loan at interest must necessarily growth or interest would capture any gradual capital.Since the currency is now almost entirely created by the credit mechanism, we must return to the practice of credit money is often presented as a ‘currency debt’ in the text or videos protesters.
The major currency crises
A monetary crisis is specifically preserved when saving currency loses all or part of its value following the loss of deposits or securities of money market investments, either because the nominal value of the currency loses its massively purchasing power.
When the currency was metallic, this kind of crisis was possible in cases of mass influx of precious metal for no consideration, following a highly successful military expedition (as in Spain after the conquest of America) or, more rarely, after a mining boom. Conversely it could produce a shortage of the metal due to the symmetric (paying a high price, looting) or following a crisis of confidence-inducing massive precautionary hoarding.
The bank panic
Depositors rushed to their banks to withdraw their deposits, retrieve their money physically in a safe form (as appropriate coin or legal tender). If the bank functioned as the currency principle (cf. supra), nothing would happen. But if the bank operates on the principle banking (as is the case today), it lent to other money on deposit with it (getting in exchange for property whose value is greater, but less available) and is unable to repay on demand: that the bankrupt insured. Unless intervention of a lifeguard.
In normal circumstances, the income generated by the loans from the bank (with deposits that are repayable) have a higher value on these deposits. They can attract a buyer for the bank (which is saved in exchange for its independence): Another biggest bank, an insurer or a state (nationalization).They can also serve as collateral for a loan (the same type of play
ers, most central banks whose resources are limitless because it has to print more money, tickets issued on this occasion may be destroyed when the loan is repaid) .
If a rescue did not occur (eg the loan portfolio is not, or does not, of sufficient value to attract a buyer or lender), the bank went bankrupt. Given the likelihood that the bank itself in debt to other banks, they are fragile and can themselves become victims of a panic, possibly with a snowball effect that can devastate the entire banking system of a country in a few months. It is a component of ‘systemic risk’. Such an eventuality is too serious to be taken lightly by the states.
Panic is consubstantial with the application of the Banking Principle, ie the ability to convert deposits (short term and immediately available, but in nothing and raise storage costs) securities (source income but risky and blocked for a longer or shorter). They occur even today (eg bank Northern Rock in the UK). But with time requirements in terms of reserves have declined, making it both more likely and more serious phenomena of panic.
The reduction in reserve requirement makes equity system with deposit insurance (at least for the amounts known in advance) by the states: this guarantee reduces the risk of panic (if possible bankruptcy of the bank does has no effect on the assets of depositors, it is not necessary to withdraw the funds to run), and conversely it makes possible a reduction of capital (since the panic does not occur because of it n is not necessary to provide the means to cope).
Hyperinflation
Hyperinflation is a situation where prices are rising at very high speed and the spiral ends when the currency is worthless. In the final scenario tickets can reach dizzying amounts of cash in tens or hundreds of billions.
In the eighteenth century, the scrip in France at the beginning of the Revolution, and tickets to the Convention in the United States during the revolution were of hyperinflation. In the twentieth century we experienced hyperinflation followed by Austrian German hyperinflation in the early 1920s. The twenty-first century, we experienced hyperinflation in Zimbabwe until mid-2009.
System breaking exchange
The most recent example is the explosion of the currency board to issue currency (currency board) Argentina in the early 2000s. The system ensured parity between the peso and the dollar. He had helped to restore currency convertibility, stabilization of prices, foreign investment and strong initial growth. But the sharp rise in the dollar would cause the crisis in emerging markets and undermine the fragile currencies.
The Brazilian real was devalued sharply in late 1999, then it is the country with the biggest economic relations with Argentina. The country is undergoing a painful deflation and facing a liquidity drying up. Some Argentine provinces produce alternative currencies (like the Argentine) at the same time that the dollars are fleeing the country or mostly no longer enter.
The accounts of Argentines are stuck in a ‘corralito then authoritatively devalued. Dollar accounts are forcibly converted into accounts in pesos at a deep discount. Investors lost a very important part of their holdings and foreign investors.
The breakdown of the interbank market: the case of CDOs (Collateralised Debt Obligation)
CDOs are debt in general property of the U.S. market that has been collected and converted into securities, cut into blocks mini rated by rating agencies and sold at auction in the market for OTC products almost liquid.They were built en masse in the monetary investments ‘dynamic’ by financial intermediaries who have doped and time efficiency of cash from individuals as firms. In July 2007 these titles have proved unsaleable and lost most of their value causing direct losses and massive cash and blocking the interbank market.
Severity of currency crises
In Zimbabwe, there is virtually no economy. The newspaper Le Monde on December 4, 2008 states: ‘Inflation is officially 231 million percent. The water has been cut in Harare. A cholera epidemic affects 9 out of 10 provinces. 11,071 cases of cholera have killed 425 people. ‘Groups of soldiers were attacked changers.’ The army, unpaid, began to loot shops. Such events show how much money is symptomatic of a regime and demonstrate the possibly fatal damage to the lack of sound money.
In Austria and Germany as the trauma is the BUBA, the German central bank will always be a very conservative policy, any risk of inflation will flee to the point of collapse of Bretton Woods in 1971 to avoid the consequences of arrival inflationary dollars and finally impose his state of mind at the European Central Bank (ECB).
The current forms of money
The coin in the piece of metal
The coin, which is called the coin, is a derivative of the currency. The pieces have no intrinsic value even if they have a cost. Variants of alloy and composition of these pieces have a practical purpose. The parts are usually produced by the public purse but do not correspond to an issue of money: they are released after exchange against an equivalent amount of tickets.
Mankind has always shown the greatest pragmatism in its choice of coins that circulate very quickly and have very little time in the pocket of users. The risk that they lose their value during the period they are held is almost zero except very few exceptions, and the sums involved are not such that the loss of value demonetization is really serious.
Many of the objects presented as primitive money are actually small change whose intrinsic value is not very important provided that the object has some resistance and is not easy to duplicate. Shells (cowrie shells) in China have played a role, for example multi-millennial small change (until the late nineteenth century) even though the monetary standards and changed the standard of the primary currency. These cowries are found everywhere and very long served small change in Africa.
No retail without small change! What makes users little fussy on alternatives if the official coin is missing.Tolls on highways or in shops in Italy, were used in the 1960’s sweet to render the currency. The devaluation of the lira had made it more advantageous to melt the official documents of 10 lire than leaving them in circulation, which has generated an astonishing proliferation of low quality sweets.
There is every demonetization of a piece of coin that substantial traffic is not presented for conversion, which has been checked everywhere including in Euroland during the changeover to the Euro.
Paper money
The ticket is born as an alternative and convenient but temporary refundable coin. After a troubled history, it will eventually replace them altogether. It passes the banknote in paper money.
The first ticket has been used in the eleventh century in China at a time when a shortage of metal blocking the Currency.The Jiao ZI were wooden planks bearing the inscription in black ink and vermilion issued in payment of money into alternative metal merchants for their own use. These boards did not circulate in the markets. But even limited, this movement was not without abuses that enabled the Song Dynasty, short of cash, take the initiative in 1024 to monopolize the issue and to make the legal tender: the paper money could therefore be used to pay his taxes. The operation was a success. The paper money will be used for several centuries and will benefit from technological advances such as paper mill, introduced in 1168, to print on paper made from mulberry bark pulp. The paper disappears from the fourteenth century as a result of excessive emissions, atrocities Mongols, the Great Plague and the abundance of money provided by Venice.
It reappears in Amsterdam in 1609 to deal with a situation so boring for a booming trade in this square.Over 400 different pieces of metal coins, more or less trimmed, more or less tampered with, hardly moving light control
s imposed on each exchange. The Bank of Amsterdam had the idea to get all currencies (at a discounted price) for redesign and transform them into a coin of some Aloi. Instead of making this new money directly to applicants, it issues certificates of deposit representing the currency convertible on demand. The metal collected is used to finance the takeover by William of Orange. The combination of innovative banking and political calculations will be found throughout history. The Florin Banco do not circulate in small businesses.
In 1619, the Bank of Hamburg, founded by Venetian banker, Warburg, received its charter and works on how the Bank of Amsterdam. In 1661, the Bank of Sweden is on a comparable basis and creates the first truly western bank note.The Bank of England starts in 1694, expands on the symbolic site of the Temple of Mithras and obtained the privilege of issue in exchange for funding massive financial needs of William III. Then comes the turn of Scotland, which is eccentric relative to the bed of trade, lack of regular cash. Bank of Scotland, founded in 1695, is totally independent and issue its notes for supervisory she gives herself.
At the end of the seventeenth century, the tickets are a great innovation success (although many believe they date from the nineteenth century). The technique is ready to spread around the world. The Scots will be the developers. It is indeed a Scot who heads the Bank of England, one that creates the largest bank in Canada (which will retain its right of issue until 1934). And it is the Scot John Law as the Regency, struggling with budget problems left by the Grand Siècle, calls for setting up a similar system:metal coins will be made to the bank and immediately made available to the Regency. In return, tickets will be put into circulation, redeemable for a given quantity of precious metal money.
The transaction is positive from 1716 to 1719. It revives a business depressed. As the Italian bankers of Florence, Law took the opportunity to take lease revenue collection and award the monopoly of foreign trade transactions with the company ever in India.
The combination of two innovations, the issuing bank notes and large stock companies, would cause the appearance of a frenetic speculation. Regency reimburse shareholders in 1719, imposed new emissions and force Law to be introduced, despite its strongest protest, an amendment of the statutes of the bank: the ticket is not refundable in a specified amount of precious metal (‘currency the same weight and just as the currency of that day ‘is the exact phrase) but’ cash money ‘.Power of semantics, the difference is quickly perceived and the financial bubble burst. The bank is inundated with requests for reimbursement to the general bankruptcy. Law is exiled to Venice. The idea of a bank issuing the Notes is discredited in France for a time.
But not elsewhere. The Bank of England survives the crash of the South Sea Company, after a stock market frenzy similar to that Law, and lost over time becomes the model of the issuing bank.
In the American colonies of the British crown, the need for money is chronic. It is as the traditional currency of the ‘redskins’ as Wampum circulates and that some states are implementing agricultural currencies such as tobacco.
The first issue of paper money is held in Massachusetts in 1690. It is followed by another in Pennsylvania in 1723 supplemented by a second in 1729 with good results on the activity. Other experiments were held everywhere, money is issued through public spending.The exception of Maryland is remarkable: all registered taxpayers received 30 shillings in notes! It should be noted that all these emissions tickets were redeemed for cash after a while.
The quarrel between colonizer and colonized, illustrated by the campaigns of Benjamin Constant, who in 1729 published his modest inquiry into the nature and the need for paper money, bears heavily on the willingness of England to impose its currency when this happens, a recession will result in settlements that will accelerate the movement towards independence. The American Revolution is financed through the issuance of notes called ‘Congress.’ Inflation will be immediate, and after 42 programs running at the hyperinflation, the currency will disappear but not without leaving the saying: ‘It is not worth a ticket of Congress.’
The French Revolution for the same reasons is financed by printing money, the scrip, which it provides the guarantee on the value of national property forfeited to the clergy and nobility.Land ensures the currency. As in the system of Law, the beginnings are excellent with a recovery in activity and the creation of remarkable fortune like that of Perregaux, future creators of the Bank of France. But the abuse issue eventually lose all value assignats which will remain infamous.
Napoleon Bonaparte and then completely recast the French monetary system by creating a new currency, the Franc Germinal and an issuing bank, the Banque de France 18 January 1800, it received various privileges in 1803. The note, convertible into gold, is now installed for long time in France, especially since in spite of the permanent state of war under the Empire, the ticket remains consistently and effectively convertible (which is not the case with his main opponent, England).
Small cuts are tickets that are related to the metal coin with which it competes. The smallest ticket is in cash and traders in the pockets of consumers.They are not often given to banks and return only slowly to the bank. This is the reason for their greater wear and dirt. A controversy has been launched in France for the introduction of one euro ticket, cheaper to produce than the room. The inability to ensure the cleanliness and integrity explains the reluctance of the ECB to move in that direction.
Bank money
It took a long maturation that economic agents are entrusting their money to banks as deposit. Currently it has become the main reservoir of money. The main reason is the security offered by banks for the conservation of liquid savings, less random than the wool socks, and the payment facilities offered by the banking system.
As the check was paid and was not accepted by the State for payment of taxes, development was slow. The possibility of paying taxes by check date of Napoleon III, who sets the laws of 1865 the rules of its use.In France, the possession of only checking account was widespread until the 1960s. The use of the check is now highly regulated. Although not legal tender (it may be rejected by the traders) the law imposed in use for many payments, even if only to ensure the traceability of the movements of large funds. It is currently prohibited from carrying more than 10 000 euros in cash as part of a regulation valid for Europe, which involves payments via a bank account for all major transactions.
Widespread bank branches deposits ‘every corner’ that has profoundly changed the face of our cities and that the checking account have these laws in favor of bank payments.
The credit card that ensures a guaranteed payment to a certain sum by the transmitter without having to worry about the provision of bank account of the buyer, despite its cost to the seller, has now widespread and overrides the check for most purchases an inexpensive shops and almost everything on the Internet.
The electronic transfer system such as the Swift can be circulated currencies worldwide at high speed. Gave immediacy and ubiquity of use unparalleled interest in bank deposit for investment transactions or purchases related to globalization.
Banks do not offer their services without monetary compensation. Not only certain means of payment are usually paid (bank transfer, credit cards) deposits banks provide the bulk of resources allocated to loans.In turn, the credit can create money to the extent that the writing credited to the borrower’s account is accepted as a basis for payment by traders and other bankers. This acceptance was initia
lly limited to networks of traders interested in the use of bank money for practical reasons, then was generalized by various devices prudential or private (risk selection, the magnitude of liquidity reserves) is general organization, as the introduction of central bank lending of last resort, banking regulations and the implementation of monetary policy.
The disadvantage of systemic Linking deposit and credit risk of an influx of applications for conversion of notes, called a liquidity crisis, as opposed to solvency crisis, describing the collapse of credit from a bank causing its bankruptcy ‘its done’ and not because of panic.This risk has led States to grant state guarantees for bank deposits to prevent stampedes devastating. These guarantees have recently been expanded and better coordinated between the European states to avoid a destabilizing competition based on this single issue.
The other drawback of the money created by the credit is that it is fleeting: money disappears when the loan is repaid. While the issue of banknotes by central banks is continuing today. The disappearance of credit money follows therefore that of credit. A ‘credit crunch’, a brutal deflation of the money that entrepreneurs asphyxia occurs when credit restrictions become too great.
The worldwide panic in September 2008 triggered by the so-called subprime crisis, risky U.S. mortgages, and marked by the bankruptcy of U.S. bank Lehman Brothers, and Universal destabilizing financial institutions, raising fears of an event like this.
EM
Electronic money is a currency stored on mobile electronic devices also allow payments. The money stored in these devices is no longer in bank deposits. It is indeed a sui generis form of three separate previous.
Like all currencies adoption of electronic money raises the question of the reality of the rights transferred upon payment. She is currently guaranteed by the bank consortium that supports Moneo. That means the merchant who found the payments in electronic money can repay its deposit account without any doubt from Moneo and affiliated banks, who believe themselves having ascertained that no one can create counterfeit money on their card. Similarly, the confidence of the owner of the electronic purse is crucial. He wants to be sure that the money paid there will not be challenged.
The very low amounts that can be stored (100 euros maximum) and the very low value of unit operations (less than thirty euro for an operation without checking) and the relative novelty of the device explain that electronic money is still marginal. But it is a currency whose use has real potential for dissemination.
Distinguish many of its electronic money storage medium. Whether it is a smart card, a mobile phone or a USB key, these tools are not the currency.
Do not confuse either electronic money that can be stored on different media and devices Monéo prepayment or credit cards in their non-use Moneo (you can now use their credit card as an electronic wallet).
Also features pre-payment do not acquire because they are an electronic monetary nature. A metro card bus or a prepaid card for parking are not the currency.No more than a year subscription to a journal or a subscription to a golf club or a magnetic card to go to the Louvre when you want. Delivery will be made gradually. It was paid in advance. The real money is in the supplier’s account.
The quasi-currencies and measures of money supply
For the purposes of monetary analysis has been developed a concept of ‘virtual money’ consists of investment banking almost immediately available but which require passage through a bank account to be used. The validation can be done almost in real time, it is not unreasonable to assume that these accounts are liquid and almost akin to money.
M1 is currency in circulation (notes and coins in circulation) held by non-financial sector, plus deposits ‘on demand’ (in banks and savings banks). At the end of June 2008, euro area M1 = 3838 billion
M2 = M1 time deposits less than 2 years and deposits with notice of less than 3 months (such as savings books, CODEVI housing savings account, savings accounts popular youth books, etc.). In late June 2008 in the eurozone, M2 = 7667 billion.
M3 = M2 titles pension debt securities issued within 2 years (such as debentures and medium term notes, as well as mutual fund shares and money market instruments (money market funds, certificates of deposits, bonds of financial institutions and corporations). At the end of June 2008 in the euro zone M3 = 9022 billion.
M0, which is hardly ever used (it is referred to as ‘base money’) is not a measure of money: it is the currency issued by the central bank (tickets net bank lending to the central bank side). In 2005 in Europe, M0 = 514 billion.
These figures are similar to the amount of GDP in Euroland (16 countries in the Eurozone) at December 31, 2009: 9534 billion Euros.
The interpretation of these aggregates has become complex because of structural changes that have occurred recently and the introduction into products normally under M3 new complex financial instruments such as CDOs (debt obligations).
M1/PIB ratio rose from 0.40 in 1950 to 0.25 in 1982. Since it oscillates around 0.25. This decline reflects improved cash management by companies and individuals who place more and more their account balance payable. However, if one takes the absolute value of M1 and that subtracts inflation is widely observed that during recessions M1 contracts and expands during the expansion phases, corresponding to greater risk taking and increasing debt by economic agents.
On March 23, 2006, the Federal Reserve stopped publishing M3, whereas this indicator was not used. ‘The ECB continues to do so even if Christian Noyer, the current governor of the Bank of France said that the introduction of new products by changing the interpretation.
A retrospective review of M3 shows the swelling of the housing bubble and the beginning of his overthrow in late 2007 that would precipitate the block then the financial markets tumbled and banks [ref. desired].
Eurodollar, Eurocurrency
A special case of these quasi-currency is the Euro-currency, including Eurodollars. The principle is the same, a cash deposit in a bank in the country of origin serves as a guarantee to an issue of title that circulates outside the country. This eliminates the need for regulation of the country of origin. The multiplier effect of the credit applies, which allows the circulation of a considerable amount of money derived, can be used for all ordinary purposes of money, including fundraising by issuing bonds
The major political disputes around the money
The quarrel between banking and currency principle ‘principle’
The question is: what rules to apply to the issuance of bank notes? The dispute occurs in England, first in 1810 when the Bank of England suspended the convertibility of its notes of metal, then in the 1840s following a banking crisis that saw the collapse of several banks and then yet, the USA, in the 1870s about ‘Greenbacks’ (Demand Note and United States Note).
The currency principle ‘states that tickets are replacing metallic coins 1 to 1. Any ticket issued may be converted without difficulty that will sit confidence and will benefit from the ticket without the risks of insolvency of banks that we see.
The banking principle ‘that considers the issue of banknotes must be adjusted as needed in the economy which, if it is constrained by the small increase in metal resources, will not be optimal.Under this doctrine, the fact that the public always has the right to demand repayment in gold notes is enough to guarantee the value, provided however that the assets of the bank, not only gold but also in any other form (the doctrine of the real effects) are sufficient.
Demonetization of gold and silver has made this very argument Untimely Meditation, it nevertheless remains as to
the issue of deposit insurance and the level of reserves (central bank money) that requires banks.
The dispute over the demonetization of silver metal
The silver metal is discredited in the United States in 1873, as part of an international movement that will see the end of bimetallism in favor of the gold standard. The issue stirred strong American politics to the point that a ‘party money’ is made which will have a role in every presidential and parliamentary elections from the late nineteenth century supported by the states producing the metal.
The quarrel lasted until the thirties when Roosevelt remonetised partly money, causing a scarcity in Asia that will embarrass the Chinese regime of Chiang Kai Check and unwittingly encourage the communist revolution.
Milton Friedman will retrospectively because supporters of bimetallism by showing that the scarcity of money due to the disappearance of money Money explains a significant part the recession that followed.
The American quarrel about the creation of a central bank
Monetary issues have always troubled the United States. After the episode of hyperinflation banknotes of Congress are feeling the need for currency issue a little more controlled. A U.S. bank was founded in 1791 by Alexander Hamilton, whose charter is temporary 20 years. It opened eight branches, serves as a depository for state funds, provides transfers from across the United States and acts as paymaster general government spending. It issues banknotes convertible into gold or silver.These tickets do not lose their value and ‘knew the general esteem.’
The U.S. Constitution defines strictly the money and gives Congress (Senate and House of Representatives combined) responsibility for monetary issues. A big political row when it moves or not to renew the franchise of the bank. Jefferson led by the opposition to win renewal. A second Bank of the United States born shortly after. That time it was President Andrew Jackson who stifle.
Jefferson’s opinion was unqualified: ‘I’ve always been the enemy of banks rather than those that take deposits but to those you pass on their paper tickets, thereby avoiding the honest cash from circulation. My zeal against these institutions was such that the opening of the Bank of the United States I played like crazy contortions of those jugglers bankers seeking to wrest the public regarding their financial juggling and earnings sterile . ‘
The banks will grow at a rate disheveled, especially in the second half of the nineteenth century. For example, Wells Fargo opened 3500 branches between 1871 and 1900. Westerns reflect this credit frenzy by showing that in any village which is mounted immediately creates a coaching inn, a saloon and a bank …. It is true that the settlers who access a piece of land do not have resources. The bank provides them with land as collateral and results of operations as a source of repayment. It was not until the 1907 crisis which will see many bank failures that the idea of a central bank which function as ‘lender of last resort ‘take shape again.
But the prejudices are such that it provides a neutral name (Federal Reserve System, said familiarly EDF) and is created in several regions (states) a similar institution with broad powers.Only well after the outbreak of the 1929 crisis and the bankruptcy of more than 9,000 banks that the Fed gets Roosevelt in 1935 all the powers of a real central bank (1929: 659 bank failures, 1930: 1352 , 1931: 2294, end 1933, nearly half the banks had disappeared since 4004 banks failed that year). But this is not the Fed that we should stop bank failures but the Corporation Federal Deposit Insurance Corporation which offered a state guarantee to depositors. In 1934, 62 banks stopped payment. The banking crisis was over.
Note: This will be repeated in 2008 when, after the crisis of confidence following the collapse of stock and Lehman Brothers, it is the States who declared not guarantee depositors central banks.
The quarrel between the Euro
The greenfield project to create a historically unified multi-country currency area in Europe has been a source of extremely high political tensions which have given rise to strong divisions within the governing parties in all countries concerned.
The separatists have said that money was a fundamental attribute of the nation which could not be transferred and the abandonment of monetary sovereignty meant the abandonment of sovereignty itself.
The extreme-left campaign was to denounce the project as a concession to the euro ‘neoliberalism’ and deprived the State of any monetary claims curiously joining one of their nemesis, Milton Friedman, who responds in n Geopolitics 53 by spring 96 to the question ‘Do you believe in the possibility of a single currency in Europe’ with these words: ‘Not in my lifetime anyway. No more than 99 or 97 in 2002! ‘
The current monetary disorders have instead reinforced the desire to join a currency area as large as that of the Euro than to leave protection. Knows the extreme difficulties that Iceland sobering countries like Hungary or the Baltic countries have had to push their high interest rates to the detriment of their economies to avoid the sinking of their currency.
Infovista: Appointment to Board of Directors
InfoVista Announces Appointment of Mr. Joe Liemandt as director of the corporation by the General Assembly of shareholders held yesterday. Mr Liemandt InfoVista to bring innovative and original style that enabled the remarkable success of the company Texas Trilogy, which he founded in 1989. The appointment of Mr Liemandt, based in the United States, underscores the commitment of InfoVista to extend its global presence by maintaining the heart of its strategies, innovation coupled with strong execution. ‘
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