Why Money is Needed ???

Money seems to divide the world into the have’s and have not’s. Given this disparity, one might wonder why money is needed. Well, here is your answer!

Why Money is Needed

In the beginning of the social interaction between human beings, the barter system worked quite well. The barter system is basically a trade arrangement and requires that two or more parties have a mutual desire to trade and have goods that the other one wants to acquire. In the small and primitive cultures of pre-history, this was often enough. The only commodities that anyone had any interest in were food, clothing, and weapons. If one man had a weapon, and the other had some food, a deal could be easily arranged.

The barter system could not last forever. It was because of the ability of the human mind to under stand symbols and to assign value to them that we were able to develop a means of moving past the barter system. Money became the means by which civilization and socialization took place. Now, when a person wished to do something beyond the production of the basics, such as a work of art, he did not have to wait for someone willing to trade the food he desired for his art. He could trade the art for money, and trade the money for the food. Money became the middle man that allowed diversification and growth.

Money had to accomplish three distinct missions in order to become a workable replacement for the barter economy. It had to be a medium of exchange. This means that people needed to recognize its value and be willing to except it in trade for goods or services. This acceptance and recognition had to be universal within the society. If your money was not accepted for the goods or services you desired, it was worthless.

Money also needed to be a unit of account. This means that it must have a set value that could be assigned to a product or a service to determine where it stood in the overall economic picture. If you made a piece of art, you needed to be able to set a money value on it, and that same money value needed to be accepted by a food merchant. In the barter system if one art piece was worth four cows, then the cows must have a value of one unit of money and the art piece must be worth four units.

You must also be able to store the money at value. This means that the money and its value had to be durable and relatively unchanging. This means that you did not have to go and buy four cows as soon as you sold your art piece. You could save your money, and accumulate it for use at another time. This was the beginning of the idea of wealth. Money has been called the root of all evil, but actually it is the root of all growth.

Interesting Facts About Money

They say money makes the world go around and it is pretty hard to argue otherwise. Here are some interesting facts about money that you might not know.

Interesting Facts About Money

The first money was what is called a commodity money system. The money was actually some type of commodity that had an intrinsic value, but was used as a medium of exchange. In ancient Mesopotamia, the shekel was actually a certain volume of barley. In early Europe, salt was used as money. In the Sydney Bay colony of Australia, rum was used as currency. Colonial Virginia used certain cash crops such as tobacco, rice, and wheat.

The first paper money issued by the United States Government was printed in 1862. The reasons were the shortage of coins and the need to finance the Civil War. People were hoarding coins because they were made of precious metals and confidence in their value as currency was fading quickly. The first United States bills were intended to replace these coins and were issued in denominations of one cent, five cents, twenty five cents, and fifty cents.

The modern one dollar bill has an average lifespan of about seventeen months before it wears out. The larger denomination bills tend to last much longer because they are not used as frequently. The one hundred dollar bill usually is good for at least five years. If all of the one dollar bills that wear out in an average year were put into a single stack, it would reach 200 miles into the sky.

The Bureau of Engraving and Printing is the Federal agency charged with the printing of money. Each day they print around 35 million bills worth around $635 million dollars. This does not mean that the money supply increases by this amount every day. At least 95% of the bills printed each year are intended to replace the bills in circulation that have worn out.

Money has been the subject of our desires and a cause of our problems for as long as we have used it. It is said that money is the leading cause of disagreements in marriage. In the First Epistle to Timothy 6:10, we are told that the love of money is the root of all evil. It is calculated that if you had 10 billion one dollar bills and you spend one every second of every day, it would be 317 years until you finally went broke. Money has come a long way since the days when people would pay their bills with bushels of barley, or bottles of rum. It can be expected that money will change even more as we move into the future.