Follow the Money
When writing last week’s article, Where did that money come from?, a banker called my attention to “Bitcoin,” a virtual currency introduced in 2009. An informal survey I took indicated that few people know very much about “virtual” currencies. So this week I decided to do a brief sketch of the historical development of the U.S. monetary system, hitting the highlights of what most of us have known and perhaps become a little foggy about, concluding in more detail with the development of virtual money. Acknowledging that I am not a currency historian, after extensive research I am using layman’s terminology to explain things as I understand them.
The value of a country’s currency is basically dependent upon the country’s integrity and having the assets necessary to pay its debt and back up its currency. This was a real problem for early Americans prior to, and for several years following, the Revolutionary War. Read more…