Whether we swipe our cards, pay through paper bills or even use online net banking, most of the world’s transactions on a daily basis are through the use of currency. Indeed, money has been the lifeblood of every country’s economy throughout the world and will continue to be in the time to come!
What was the world's first currency unit? When and where?
Earlier economic transactions might have been limited to the barter system, but there was no reference against which the fairness of barter transactions could have been evaluated somehow!
Between those prehistoric transactions and the modern used currency, there was an era when the whole concept of money became practical with the invention of coins.
Earliest coins
Before even coins came into existence, there was a time when precious metals such as gold, silver, platinum etc. became the reference for commodity. This started early, back in the Bronze Age - possibly even back in the time when gold was found without any metallurgy or mining. The historical evidence shows that gold coins were used for the process of accounting in the Egyptian reign in the 3rd millennium BC, whereas silver was highly used in Mesopotamian region.
Brass coins are said to have appeared in the 11th century BC, in China. These came in variety of shapes and were unmistakably coins, even though they were not round shaped.
The invention of coins is usually accredited to the king of Lydia, Cyges Mermnadae, who reigned from 680 BC to 652 BC, and was also the founder of the Mermnadæ Dynasty. Early Lydian coins were made up of natural electrum (gold alloy with 20% to 45% concentration of silver) and came in oval shape. With the arrival of Croesus (561-546 BC), the two metals got separated. He introduced two types of coins, one of nearly pure gold (98%) and another of silver.
The gold coin was nominally 75% of the weight of silver coin. Back then, a gold coin used to be traded for 10 silver coins.
Back when the US Constitution was adopted, there were three things established in relation to bullion currency in it:
- The official money in the United States would be precious metals - silver and gold.
- The basic unit of value would be termed a “dollar” and would comprise a 375 and 64/100s component of fine silver.
- All other foreign and domestic coins would be evaluated in relation to this official silver dollar.
Precious metals: Rare and valuable investment
Precious metals are rare metals with high value, highly popular precious metals such as silver, gold, and silver, and can be bought easily by purchasing mutual funds, futures contracts, or bullion currency, which is physical coins or bars.
Whenever a currency experiences volatility, precious metals become attractive assets.
Not only are these precious metals universally considered valuable, but storing them consistently longer holds more value in comparison to any national currency.
It is similar to getting legal tender. Popularity and processing fees with a steep earning curve of investment make this option a bit unreliable for the common public!
Speaking of unreliable currencies takes us to digital currency such as crypto tokens and crypto currency, a radically new replacement to precious metal coins!
What Makes Precious Metals so Precious?
It can be owed to three reasons.
Firstly, it’s their rarity!
Second of all, they possess high market value. Even if newer precious metal sources or elements get discovered, we can expect their price to be fairly stable or drop one day. However, if its demand rises abruptly, the price is bound to rise.
These are chemically resistant.
They are also corrosion-free as they don’t react with steam or water and neither do they dissolve in acids. They get dissolved but only in the royal water.
Gold and silver are considered to be quite volatile at the time of need!
There are many mediums to buy precious metals like silver, platinum and gold, and add them in to your treasure hunt.
So if you've just started thinking about investing in precious metals, read about how to use it and how you can invest in them.
Fill Up Your Treasure Chest with Precious Metals
How to Use Precious Metals Coins or Bars
Today ,the world’s leading precious metals mints and refineries are fabricating a wide array of bullion coins and bars in silver, gold and platinum. The highly asked query is whether to purchase precious metal coins or precious metal bars, or both. While the final decision remains to be a matter of preference for the investor, it is quite helpful to list down how these precious metals can be advantageously used!
- Gold, silver and platinum have retained their values, especially when investors have lost faith in acceptance of asset markets such as paper currencies. These are used as stores of wealth during economic turmoil situations or uncertainties.
- During situations such as crises of government upheaval or hyperinflation, precious metals have proven to be assets and served as flight capital.
During the period of exodus in the 1930s in Germany, many people managed to bribe their way out and fled the country by paying for passage with precious metals such as gold and silver.
- Accepted widely as medium of exchange, replacing paper money!
- For thousands of years, precious metals have been accepted as currency in many countries.
- Precious metals are the oldest form of money due to their fungible and mutually interchangeable nature, just like money!
- It serves as legal tender in situations of economic crisis, though the precious metal’s content is always worth more than its face value.
- Used as collectible due to its rarity and thereby boosts its value for being far beyond the price that you pay for it!
- You can get expert inspection and knowledge to ensure its authentic metal content.
- It provides the owner with a sense of pleasure in a similar manner to a fine craft work or painting.
- Gold and silver are used to store value for a long time and used as hedge against economic downturn or inflation.
- They have proven to be excellent vehicles for speculation and investment.
- Even today, precious metals has saved their important place in an investor's portfolio.
The Bottom line - All That Glitters Is Gold, Silver, Platinum and Palladium
Precious metals currency provides a useful and safe means of utilizing your investment portfolio. The trick is to know your risk profile and goals, before diving into it. The high volatility can be channeled effectively to accumulate wealth for future retirement. But if left unchecked, it can ruin the whole financial plan of an individual or entity!
Happy investing!