exchange of goods existed in the Stone Age, when there was a division of labor.With the development of civilization of the monetary system changed.People minted coins of gold, silver and other metals.But stocks of these resources are limited.A large-scale wars and other crises much depreciated currency.In place of coins made of precious metals were bills.While their release was secured resources of the state, there were no problems.They emerged when the nominal value has become different from the real.That money was even given a special name - fiatnye currency.What it is?
History of
State has the right to restrict the freedom of citizens.In particular, the use of a particular currency for the calculations.The government has the authority to deprive currency backed by gold or silver.This decision carries a large amount of risk.But if it is taken, the money ceases to be a commodity and becomes fiatnymi.
idea first proposed the use of such currency ancient Greek philosopher Plato.He believed that the citizens do not have to keep gold in the form of the payment unit.It is better to create its own currency, the use of which is limited to a certain territory.
Many countries have tried to embody the idea fiatnyh money.The first was the Roman emperor Diocletian.The camp has grown while the inflation rate, there are many counterfeiters.The emperor ordered to use only solidus minted in Rome.In addition, it was set uniform prices for goods.They worked throughout the empire.During the execution of the order followed the executioners.They immediately executed any merchant who dared to break the law.The Emperor took a tough decision, as understood the danger of neglect of currency.It is nothing has been provided.Hence the concept of "the money trust."But even such drastic measures could not change the situation.Act soon canceled.
second attempt
truly earned this idea only in China.During the Tang Dynasty in the VIII century produced fiat money.These measures were taken to prevent inflation.But the experiment failed - merchants preferred to deal with gold.By the X century the government has released a fully guaranteed by the government of the coin.
the beginning of the First World War, virtually every state to use secured currency.But the high cost of conducting military operations have led to the widespread occurrence of fiatnyh money.For the normalization of the situation was made Betton Woods agreement.According to this document, one dollar was equal to 1/35 troy ounces.All other currencies were tied to the currency of the United States.This system lasted until 13 February 1973.The dollar then was 1 / 42.2.The agreement was terminated.
fiat money - what is it?
In Latin the word "fiat" means a decree, the decree.Literal translation: "So be it."Fiat money - the currency that the government is positioning as the only legal tender.Their intrinsic value, or very little, or no.Currently, most of the paper money is fiatnoy, including the US dollar.Its value is guaranteed by the authority of the state.Fiatnaya currency is not pegged to gold.It generally does not assured.
main difference fiatnyh money from the commodity is free conversion of the latter.The government can not print currency secured more than it has resources.That is, any expansion of the global economy limited the amount of gold reserves of humanity.
Features
Fiatnaya currency - it is fiat money.Government announces special decree certain monetary unit as the only means of payment.The difference between the nominal and the real value of such currency - this is fiatnaya currency.The course is often set against the citizens.Stories about the currency denomination of a lot.Here is an example when the government agreed to voluntary inflation, adding a zero to each bill, no.
Recently, more and more countries refuse to use the money provided.They go on fiatnye.This is due to the fact that the state is practically no limit on the issue of currency.This solution increases the risk in managing the state.Fiatnye unstable currency to changes in the economy.
Alternative
a return to the gold standard, not talking.This decision carries two main risks:
1. Some economists believe that gold can also be called "artificial currency".Its value is converted.
2. Sooner or later, but the rising price of gold forms a new "bubble".And then quotes no one can control.For fiat money is the government.For there will be no gold.
Fiatnaya currency has more value.It is formed on the basis of decrees of the government.It also causes a major challenge - a low level of management.If any errors at the state level artificial currency becomes very vulnerable.It's one of the reasons for the latest international financial crisis.A natural consequence of such a situation - investors have increased interest in gold.The prices for this precious metal rise for several years.The Russian banks offer relevant contributions.They, by the way, do not fall under the system of compulsory insurance.But wanting still a lot.
Future "air bubbles"
In the days of the pharaohs of ancient Egypt the dead were buried with gold in the repositories rebuilt.People believed that they would use their wealth for all eternity.This idea worked.These gold a thousand years did not touch nor thieves, nor the tax authorities.But then it was real money.Today, many governments are constantly experimenting with paper bills.Fiatnaya currency - is the result of their experiences.
rapid growth of paper money created dangerous bubbles.They are almost at the same time set the record highs in every major class of financial assets.Find a solution to this problem is impossible.By printing money, the National Bank creates inflation.In case of refusal to issue the reverse situation occurs.And there is utter superfluous words, financial markets are beginning to panic.In Europe, there are already negative interest rates.Central Bank are trying as quickly as possible to restore confidence in poorly capitalized banking system.A good emerging markets want to create their own financial structure.
has been repeatedly changed the financial system, currency trading methods.This process is repeated again.Today, the dollar and the Central Bank of the United States are the main elements of the global financial system.But many are already tired of constantly obey the rules of the state, which manages to constantly increase their debt secured "risk-free" bonds.In the near future the dollar will lose its importance and will be a new financial system.Already today there are technologies that eliminate the need for banks: crypto-currency trading platform.It is believed that most of the money supply today is stored digitally.Including your bank account.
Yuan as a replacement dollar
If China will pay a portion of their reserves in gold, the currency of the country suddenly acquire great importance in the international financial system.Of course, an attempt to shift the US with a leading position in the world's most expensive metal reserves (328 billion in the spring of 2014) is very risky.But the cost of failure - loss of profits.
Most countries prefer artificial money and floating exchange rates.But gold has special properties.More than two thousand years it was the main means of payment in the world.We do not need the loan guarantees to third parties.No one asking questions arise when people were paid receipts for gold for bonds.Artificial money today accepted through credit guarantees states.In crisis situations, they can not compete with the universal means of payment.
If dollar, euro or other currency fiatnaya be taken everywhere, the Central Bank did not keep to the precious metals.But they do it."Money on orders" did not become a full equivalent.Of the three dozen countries-participants of the International Monetary Fund, only four did not have gold reserves.Clear statistics on 1 January 2014:
- the price of gold on the balance sheet of the Central Bank of developed countries - 762 billion dollars;
- their share in reserve - 10.3%.
necessary to reduce stocks
British economist John Maynard Keynes called gold "relic theft" because the yield of the asset to the cost of storage is negative.Then why the Central Bank over the world it is collected?
politicians more than once offered to sell part of the gold reserves.In 1976, the idea outlined US Treasury Secretary William Simon and head of the Board of Governors of the Federal Reserve Arturt Bern President Gerald Ford.They have offered to sell 275 million ounces of gold and invest the proceeds in profitable assets.His idea what they are motivated by the fact that the metal has lost a great monetary value.But a common language with Burns They never found.
As things stand today
Subsequently, the issue was discussed at the meeting of the Central Bank "Big Ten".They sought to reduce the gold and currency reserves, but realized that the massive exposure of quotations greatly reduce the price.Therefore, agreed that who, when and how much to sell.But Beijing has ideological views with respect to gold was not.Until 2002, their stock was 13 million ounces.For a year they have increased it by 45%.Even after 7 years was brought to the level of 34 million. At the beginning of 2014 on the foreign currency reserves, China ranked fifth in the world after the United States (261 million), Germany (109 million), Italy (79 million) and France (87 million).
fiat money: examples from the modern world
Virtually no nation spends emissions to ensure national wealth.Therefore, the dollar, the euro, the Russian ruble and other currencies can be attributed to artificial.But in addition to paper, there are also electronic fiatnye currency.What it is?Artificial
digital money denominated in one of the national currency.The government makes the laws of citizens to take them for payment.Issue, redemption and conversion takes place according to the rules of national law.E nefiatnaya currency expresses the value of non-state payment systems.The latter controls a turnover and redemption.
Both types are divided further into two groups.Net currency - electronic money, which are passed on a hardware basis.Examples: PayPal, M-Pesa (African payment system).The second group - the system based on the SIM card.Examples: Visa cash, Mondex, Chicknip.But popular in Russia Webmoney, QIWI, RBK Money, EasyPay are nefiatnym payment systems.Just as Yandex.Both groups, exchange of e-currencies among themselves.
Summary
government special decree determines which currency will be carried out calculations in the state.While its output is provided to national wealth, it is called a commodity.As soon as there is a difference between the real and the nominal value, there are artificial money.Fiatnye currency issued under the state guarantees.They are not resistant to the financial crisis and could greatly harm the economy.
