Originally posted by 00PS
Writing words on paper said worth the value of gold and silver and over time talking all the gold and silver of the world. Is this
accurate?
Using coin or paper money need not have anything to do with international bankers. I don't recall the money that the US states printed being backed
by international banks. As far as using it to get the worlds gold, thats obviously not working, and indeed, can't, since most money is no longer
tied to the value of gold or silver.
when or what event tipped the scale of balance valuing the bankers notes over gold and silver?
Well, coins were minted by states in the ancient world and sometimes their value, or at least exchange value, had to be set by the state, but there
weren't any banks, let alone international ones, at the time. The Spartans, famously, used iron bars as their currency, rather than gold or any
precious metal.
This site notes that:
806 AD: Paper Currency
The first paper banknotes appeared in China. In all, China experienced over 500 years of early paper money, spanning from the ninth through the
fifteenth century. Over this period, paper notes grew in production to the point that their value rapidly depreciated and inflation soared. Then
beginning in 1455, the use of paper money in China disappeared for several hundred years. This was still many years before paper currency would
reappear in Europe, and three centuries before it was considered common.
Interstingly it notes:
1816: The Gold Standard
Gold was officially made the standard of value in England in 1816. At this time, guidelines were made to allow for a non-inflationary production of
standard banknotes which represented a certain amount of gold. Banknotes had been used in England and Europe for several hundred years before this
time, but their worth had never been tied directly to gold. In the United States, the Gold Standard Act was officialy enacted in 1900, which helped
lead to the establishment of a central bank
With the gold standard begining to end around 1930. So the gold standard just barely lasts 100 years. Either way, the use of paper money doesn't
result in the 'hoarding' of gold in an international bank reserve, especially when the money has nothing to do with gold.
Even when coins were worth the gold they were made out of, states collected large reserves, and very very little coinage/gold was actually in
circulation, with the people prefering to hoard coins rather than spend. Using paper money results in greater circulation of wealth.
Here is an essay written by Ben Franklin on the subject of paper money
I found it on the below page
Source
In addition to the State issues, a number of public banks began issuing loans in the form of paper money secured by mortgages on the property of the
borrowers. In these early cases the term "bank" meant simply the collection or batch of bills of credit issued for a temporary period. If
successful, reissues would lead to a permanent institution or bank in the more modern sense of the term. One of the best examples was the Pennsylvania
Land Bank which authorized three series of note issues between 1723 and 1729. This bank received the enthusiastic support of Benjamin Franklin who in
1729 published his Modest Enquiry into the Nature and Necessity of a Paper Currency. His advocacy did not go unrewarded as the Pennsylvania Land Bank
awarded Franklin the contract for printing its third issue of notes.
