On the Origin of Specie
While the function of money is obvious, it’s origins are anything but. The known use of money dates back millions of years. Various currencies have evolved over this time, from electrum coins in Turkey to paper in China and Cocoa in Central America. But how did these agreements of currency come about? Experts state that the origin of specie is a market-led response to barter costs. The result is the use of a currency that requires little or no cost to trade. On a larger scale, findings indicate that only an “informal” currency can develop in a private capacity, but may still exist on a grander scale. The dollar’s position as the world’s reserve currency is an example of this. However, history shows that when a competitor currency becomes the preferred currency with which to deal, firms and governments move on. So what does this mean for the dollar, in light of the yuan growing in strength?
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