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The Invention of Money

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https://www.newyorker.com/magazine/2019/08/05/the-invention-of-money

newyorker.com

The Invention of Money
When the Venetian merchant Marco Polo got to China, in the latter part of the thirteenth century, he saw many wonders-gunpowder and coal and eyeglasses and porcelain. One of the things that astonished him most, however, was a new invention, implemented by Kublai Khan, a grandson of the great conqueror Genghis.

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Paper Money

The instruments of trade and finance, like paper money, are groundbreaking inventions, put to use by collective acceptance using authority and seals of trust.

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Money's Worth

The financial crisis of 2008 showed that the system can buckle anytime and money may not always be worth the same.

As we get hyper-connected, the state-backed authority of currency, and what ...

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The Idea of Libra Currency

The idea of Facebook's Libra, an attempt to create a new currency made from the architecture that powers Bitcoin, is that the value of new money is not derived from state authority, but a combinati...

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The Invention of Paper Money

The King Williams Administration used to borrow large sums of money used for wars and then levied taxes on ship cargo and spirits to pay back the interest. This gave rise to Banks like the Bank of ...

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John Law

“Money is not the value for which goods are exchanged, but the value by which they are exchanged.”

John Law

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The Rise of Paper Money

Paper Money was pushed as a 'fiat' currency due to an attractive quality: it was guaranteed to trade by the state authority for a specific weight of gold or silver, and couldn't be melted down or d...

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The John Law Economic System

The financial system in use today is a version of John Law’s system:

Each country in the developed world has a central bank that issues paper money, manages the supply of credit in the inter...

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Gold

  • Real money is only gold, and all the other forms of currency in the system are merely different kinds of credit. 
  • Credit is an indispensable part of a functioning economy, so it c...

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The illusion of control

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Success and crisis

Success in “normal” circumstances does not mean that you will succeed in a crisis since, in a crisis, the rules change. However, it can make you feel confident and make you highly vulnerable to the next crisis.

Drawing up your own tests

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Encourage innovation in risk models to increase diversification and decrease risk.

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Napoleon Hill...

... is the most famous con man you’ve probably never heard of. 

Born into poverty in rural Virginia at the end of the 19th century, Hill went on to write one of the most successful self-...

Hill was a charlatan

Napoleon Hill was said to be an advisor to two presidents: Woodrow Wilson and Franklin Delano Roosevelt.
In fact, there’s no evidence whatsoever outside of Hill’s own writings that Hill met President Wilson or President Roosevelt, let alone acted as a trusted advisor to both.

Hill and Carnegie

Napoleon Hill’s most infamous claim was that he met and interviewed at length the industrialist Andrew Carnegie in 1908.

Andrew Carnegie's biographer David Nasaw found no evidence of any sort that Carnegie and Hill ever met.

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The Earliest Banking Systems

The Earliest Banking Systems
  • The earliest banking systems date back to 8000 BCE when trade was recorded in a log, keeping a written note of the transactions.
  • Mesopotamia was the home o...

Banking Systems In The Medieval Period

Brokerage and loans started in an advanced form with merchant banks, though crop loan was still used for lending and credit activities.

Italy was the home of the earliest banks (which evolved into the modern banks), and even the word ‘bankrupt’ comes from the Italian word ‘Banca Rotta’.

Banks Between The 17th And The 19th Century

  • London was where the biggest action was in the banking world, with the Goldsmiths of London being the first proper bank. Services like vaults, bank debts, deposits (made inside the bank) and loans became popular.
  • Banknotes were first offered by the Bank Of England and were called promissory notes. Soon other services like cheques and overdrafts followed.
  • The Rothschilds started their financing business in the 19th century, eventually becoming the richest family in history.

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