Changes

The idea of money and currency has existed since the dawn of civilization more than 5,000 years ago. Early currencies were somewhat crude and mainly just involved using standardized weights to determine the value of certain commodities. The ancient Lydians were the first people to use coins as a form of currency and as store of value, which was a major step toward money as it is known today. After the Lydians, silver became the type of metal most people used to mint coins, but gold was always the reserve and what “backed” the money. Even after paper money became the norm in the modern period, gold still backed most economies and was convertible in paper currency, and vice versa, in many countries into the twentieth century. But gold as the standard backing a national currency officially ended when American President Richard Nixon terminated the Bretton Woods financial regime in 1971. From that point forward, historians and economists, as well as laypeople, have repeatedly asked: what is the value of money?