A Capital History – That of Money

One of the core motivations in securing a decent job in Guernsey is to win an attractive salary. Within investment and investment banking jobs in Guernsey the reimbursements scale is actually often higher than in other industries along with the very nature of the jobs themselves tend to be centered on coinage and also the pursuit of it. These days where we money is central to not only our Guernsey jobs but our daily lives we can easily lose track of the real significance of it or the fact it will have not been around forever.

What is often forgotten is that primitive societies did not have money, since they did not trade. When trade began it was under an barter system. Goats could be changed for corn or sheep for axes. As society became more more complex, barter evolved inadequate where as a trading system. Goats could be an acceptable payment for one man, but not for another, who might prefer sheep or cattle. Even then it was easy to dispute the question of just how many sheep were worth an sack of corn.

Gradually precious metals along with most notably, gold also silver were used as payment plus became the first money. Precious metals had several advantages. Currency had to be scarce. It was no good basis an monetary system upon the leaf. Everyone in the world would soon grab all the leaves around plus the smallest payment would require an wheel barrowful. An basic lesion I hope our over keen western politicians remember, for should they keep printing dollars, pounds and euros they will soon be as common where as leaves! Money plus had to be easy to carry around and also in divisible units. Gold along with silver were sufficient scarcely, desirable along with portable to meet society's requirements. Of course it soon became inconvenient to carry gold and silver ingots. Coins were created by the kings of Lydia in the eighth century BC. Following Alexander the great a few centuries later it became customary for coins to carry the head of the king upon them.

There will be a variety of functions which money serves. It is actually a measure of value. Sheep might be compared with with goats and also chalk with cheese by referring to the amount of currency one would reimbursement for each product. Coinage is actually also an store of value. It may be saved until it is actually needed, unlike the goods it buys, which will be often perishable. Creditors could accept currency where as an future payment, confident that its value may remain stable in the meantime.

With gold and silver the most principal monetary metals for coinage, very soon goldsmiths and also silversmiths became the first banking professionals. Nervous people, who were well aware of the dangers of keeping their gold under the bed, began to use their smiths, who had secure storage facilities to store their raw gold along with silver, where as a place to store their wealth. In return the smiths cave the depositor an handwritten the note. It soon became easier for the depositors to pay their creditors with the hand written note rather than go through the time consuming process of recovering the gold also giving it to the creditor. Creditors were happy to accept the receipt whilst payment as long while they could guarantee they could always redeem the receipts for gold when necessary. To ensure all had faith in the receipt a common standard was required, one guaranteed by the most powerful plus wealthiest entity around – the state. There fore the first bank notes were created, the first bank companies set up and also first bankers appeared – although the soot smeared silversmith is actually a far cry from the bankers in their Guernsey private banking jobs in these days!

The smartest of these early "bankers" took things to the next stage. They noticed that of the gold stored in their safes, only a small quantity was ever required for withdrawal and also that amount was roughly matched by fresh deposits. There was there before a substantial quantity of money sitting idle. This may be lent (and interest earned upon it) in the knowledge that day to day requirements of depositors may easily be covered. As currency has grown far more sophisticated, it has grown farther away from its origins. Banknotes replaced coins. Checks replaced banknotes. Debit and credit cards replaced checks. Online payment techniques like pay pal could herald the future replacement of credit cards. However the basic principles remain and the whole system is based on the confidence of all concerned. Where as we learnt not long ago knocks to that confidence, affect all of us, globally in our daily lives and within our Guernsey jobs!

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