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  • Wen Capital Advisory Group

History of Currency

Updated: Feb 15


To Barter or Not  to Barter

Contrary to popular belief, the idea that bartering pre-dates the invention of other forms of currency is now seen as unlikely. 1 The reason? Bartering is extremely inefficient. Historically, people have  engaged in a barter economy as a supplement to other  forms of payment.

With the rise of agriculture, other animals like cattle, sheep, camels and other livestock, along with sacks of grain were used as a traditional "stores of value".  Cattle were even called as "capitale" in latin, which is where we get the word "capital".2


Cowrie shells are the small, colorful shells of a certain type of sea snail found in the Pacific and Indian Oceans, and have been used as currency all over the world. Individually or strung on necklaces, they represented everything useful in a currency: small, divisible, and durable.3

700-600 BC COINS

Alternative Shapes

Besides the lumps of gold and silver in Turkey, the earliest coins took on shapes of knives and  spades.4

The first coins were put into use in seventh century Turkey. Not exactly round, they were small lumps of a gold and silver micture called electrum, often stamped with a pattern on one side.  Despite their irregular shapes, early coins were held to a strict  weight standards.5


In addition to the first paper money, China also invented  the first "banknotes," made of leather. One foot square decorated with patterns and a fringed border, princes were required to purchase these notes at a price of 400,000 copper coins, and to present gifts to the emperor on them.6

The Tang Dynasty of China was the one to put paper money into use, nearly 500 years before it caught on to Europe. But early experiments were not without pitfalls,: china went through financial crisis when the  paper money production grew until its value bottomed out, causing massive inflation.7


Through the Nose

The phrase "through the nose" has its origin in ninth century Ireland. when the Danes conquered the island, they took census by "counting noses"  imposing high taxes on each "nose."8

Britain was the first country to adopt the gold standard as the fixed value of their currency.  Germany, France and the U.S. followed suit in 1870s. By 1937, in the wake of the Great Depression, not a single country remained fully on the gold standard, and in 1971, the U.S. fully suspended it.9


This material does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.


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