796
edits
Changes
no edit summary
[[File: Currency.jpg|300px|thumbnail|left|A Collection of Commonly Used Modern Currencies]]__NOTOC__
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?
In the midst of the collapse of the Bretton Woods financial system, economists, bankers, financiers, and government leaders scrambled to understand their new economic reality. One of the primary theories that developed was Modern Monetary Theory, which was heavily influenced by chartalist and Keynesian economic theories of the early twentieth century. MMT gradually became the leading economic theory of the industrialized world, although not all economists are necessarily on board.
A notable and influential group of economists led by James Rickards believe that MMT policies could be the death knell of the modern economies by creating unending cycles of deflation and inflation and that gold still has a place in modern economics. Another emerging group of economists believe that MMT places too much emphasis on the idea of money and that the concept of credit has all but replaced money in many countries. Still, MMT is the most important economic theory currently because the people who run the central banks and treasury departments of the wealthiest nations follow its tenets.
{{Mediawiki:AmNative}}
