The demonetization of gold is a gradual process of gold losing its monetary functions: the causes, stages and consequences

Anonim

The demonetization of gold is when gold ceases or ceases to be used as a means of payment. This process is natural, since many properties of gold, which previously gave it significance, have become uncomfortable for many. Gold has not ceased to be highly valued, but it has lost its former value.

The early stage of development of commodity-money relations. The first use of gold as money

The exchange of products of labor existed in primitive times. Neighboring tribes exchanged surplus products, but such an exchange was not always equivalent. More time, labor, and resources were spent on the manufacture of some goods than on others. The tribes somehow tried to agree on the proportions of exchange, but a different situation appeared - the formation of surplus purchased product. Everything changed when people mastered the smelting of metal.

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The first metal used was gold. It was easier to find it - pieces of gold in the river or in the cave were immediately visible. It was not necessary to have exceptional knowledge of its processing or dig deep to find. Today it sounds crazy, but gold was used to make household items, tools and weapons.

Lugs were made of gold on the teeth of a plow, knives, swords, cups, jewelry. It was used everywhere and there was always a need for it. Then people learned to mine and use other metals, but the habit of paying with gold remained. It was convenient: gold did not rust, did not lose luster, it could be divided. In addition, deposits of copper, tin, silver or iron were not everywhere, and gold at that time was widespread. For payment, both finished products and ingots were used. The main measure of value was the weight of the metal.

The appearance of coins

The first gold coins appeared in ancient Rome. They were minted in the backyard of the temple of the goddess of trust - Coins, hence the name. On one side of the product, its weight was minted, on the other, the face of the emperor in profile. Along with monetary circulation, barter was also distributed at the same time. Barter is the exchange of goods for goods. But it was not the demonetization of gold. Just then gold was not enough, moreover, monetary circulation was still in its infancy. For the poor, it was easier to exchange a thing for a thing than to change it for money first (you still have to find a person with money), and then buy the goods he needs with money.

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Middle Ages, the appearance of bills

The greatest distribution of gold as a means of payment acquired in the Middle Ages. Any more or less self-respecting monarch considered it his duty to mint his own coin. However, the affairs of the autocrat did not always go well, and many of them "spoiled" their coins, reducing their weight. It was not only kings and lords who dealt with the corruption of the gold coin. Merchants and money changers also contributed. The coins were cut into pieces, they were erased, they were smelted and peresekanivali. But this was not the reason for the demonetization of gold.

In the Middle Ages, the danger of losing gold coins and bars during their transportation was higher than getting damaged coins. On the roads brigands and knights were operating. Transporting gold was dangerous. The merchants and the first bankers came up with a new way of how to make payment without transporting coins - a bill. A bill is a payment order that gives its holder the right to receive gold coins from a specific person. Soon, bills began to be used along with coins. In essence, the bill was a gold-backed security. That bill was the prototype of the first paper money - banknotes.

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Growth of manufactory production

With the development of production, the manufactory and the first factories began to produce more goods, and mostly mass consumption. Gold mining did not keep up with the general growth, there was a sharp need for replacement, as the resulting cash deficit hampered economic development. The growth of production and an increase in commodity turnover is one of the main reasons why the demonetization of gold took place.

The appearance of paper money

In parallel, there was a circulation of bills, and then there were banknotes. A banknote is a security issued by a bank against gold. The bank was obliged to conduct an exchange upon request. Initially, the course was set to one to one, but soon, due to excessive abuse of the printing press, the rate of paper money began to decline. There were calls to bring everything back, as it were, but no one was ready to return to the previous level of production and consumption.

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Industrial Revolution and the era of the Gold Standard

The industrial revolution led to an increase in labor productivity and cheaper goods. There are more goods, they have become more diverse and, last but not least, more affordable even for the lowest strata of society. There was an urgent need for large amounts of cash, but their release should be rationed so as not to result in their complete depreciation. Thus, a new function of gold, in exchange for the lost to others, appeared. Gold coins ceased to be a medium of circulation, but became a means of security and a factor restraining the uncontrolled emission of currency.

The gold standard was widely adopted at the end of the XIX century. By that time, gold was used in international payments as a standard of value, less often as a means of payment. Although it was transported on trains or ships, the transportation of gold was more the exception than the rule. If you could get by check or bill - used them. Gold coins and bars were transported only in exceptional cases.

Implications of the two world wars for gold circulation

The strongest blow to the Gold Standard was dealt by the First and Second World Wars. The gradual process of gold losing its monetary functions has become inevitable given the fact that the participating countries have lost their gold and currency reserves. By the end of World War II, there were practically no gold reserves or any gold reserves at all in Europe. The United States, the most secured country of gold reserves at the time, took an unprecedented step by providing assistance to European countries in exchange for certain privileges. In the summer of 1944 the Bretton Woods Agreement was signed, according to which the dollar became a world currency. He was pegged to gold at a fixed rate of $ 31 per arbitration ounce (approximately 31.1 grams). It was possible to exchange dollars for precious metal upon request.

However, this situation did not suit everyone. The first country that decided to return the gold back to Europe was France. Charles de Gaulle sent a plane loaded with $ 1.5 billion to buy gold in the United States. Following France, Germany decided to return its gold, but did not have time. The US leadership urgently held a conference in Jamaica in the summer of 1976, following its results the Bretton Woods Agreement was annulled and a new one was adopted, according to which the US dollar did not have a tight peg to gold. Other currencies were also recommended to go to the "free floating".

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Our days

Is the process of gold demonetization completed or not? In our time, this question can be safely answered in the affirmative. And although the IMF does not prohibit the conduct of international payments in gold coins and bullion, precious metals are practically not used in international payments. Gold is considered as an object for long-term investment or speculation, and not as a means of payment. Gold and gold coins do not go as freely as several centuries ago. They are not accepted in settlements between individuals and legal entities. However, this does not mean that precious metals are used only for making jewelry.

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Gold bars and gold coins can be purchased at Sberbank branches (not all). Any citizen can open a metal bank account. For those who wish to invest in a reliable asset and for a long term, gold is one of the most convenient tools. Sberbank publishes gold quotes along with dollar and euro quotes.

Stock Exchange

On the stock exchange, gold is one of the most interesting tools. On the one hand, it is a separate commodity, on the other - its relationship with currencies of different countries, and especially with the dollar is obvious. When investors are not sure about the US dollar, they transfer money into gold and vice versa. Gold does not lose its value over time, which can be checked by looking at Sberbank gold quotes.

Surplus precious metals national banks put in special storage. These stocks - treasures, on the one hand, make it possible to maintain a high rate of the precious metal, on the other - to use as a “airbag” if it is necessary to support the national currency.

Consequences of demonetization

The demonetization of gold is the process of a gradual transition of money circulation from the value embodied in the means of payment itself, to its abstract form, when money has finally lost its material form. Today, the economy uses a new form of money - electronic. Widely spread credit money. You can borrow, and then return after a while. For the most part, money is not provided by precious metals, but by manufactured goods and services.

True, some economists still believe that the rejection of gold collateral is a mistake. The reason for this skepticism of paper and electronic money is that there is a risk of losing control over the issue of money.

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The concept of inflation appeared along with the demonetization of gold. This problem did not appear because people stopped using gold coins and bars as a medium of exchange. The fact is that not all countries have gone through all the stages of monetary development.

In some countries in which the mechanisms of monetary relations have not been developed historically, local rulers print banknotes uncontrollably, which leads to their rapid depreciation. If there is no production of goods and services in the country, then even if they put gold on their territory, this will not solve the problem of providing the population with everything they need, and gold will flow to where it will find more useful applications.

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