We have been chasing money for thousands of years. But the money we are chasing nowaday is quite different from the one used in the old days. As with everything human, we complexified the system over time. We started of with shells, precious metal, banknotes, and are now regularly using credit money. Money is part of our daily life & we often take its functioning for granted – which is good! After all, the system works thanks to the faith everybody hold in it (fiduciare anyone?).
So when I received this very simple and straight forward summary in a Credit Suisse article recently & wanted to share it here.
Money before Money
The use of proto-money may date back to at least 100,000 years ago with the use of Shell or red Auchre.Payments in Precious Metals
The Code of Hammurabi in Babylonia includes laws governing banking operations. It describes payments in weighted amounts of silver around 1780 B.C.Coins
The first coins are produced in Lydia (in Asia Minor) around 650 B.C. They were composed of a mixture of gold and silver (electrum be the geek term).Derivatives
Aristotle mentions the use of a call option-like agreement with olive presses in his writings dating back to around 300 B.C. By deduction – Philosophs love deductions – we can assume that option-like agreements were common in ancient Greece.Bank Notes
Chinese were the first to use bank notes. We have a first record mentioning a note from 1024. Swedesh were the first European to issue bank notes through the private company Stockholm Banco in 1661.Bonds
The earliest-known bond was issued by the Bank of Venice in 1157 to fund a war with Constantinople.Commodity Futures
Merchants began to finance their trading expeditions by selling goods they expected to receive before actually possessing them during the Renaissance.Shares
The Dutch East India Company, founded in 1602, issued the first negotiable share certificates in 1606. These were traded on the Amsterdam stock exchange.Financial Futures
The first financial futures contracts were traded in 1972. Their popularity surged with the abandonment of fixed exchange rates in the ’70s.E-payments
Electronic payments exceeded cash transactions in the US in 2003.
By the way – the scientific study of money and its history is called Numismatics. To your surprise, I’m sure you know some Numismaticians. All coins collectors are considered Numismaticians 