Spotlight | The Origins of Money

Editor’s Note: The national monetary system is the most powerful system in our country because everything in our country is connected to it.  Unfortunately, this system was not designed to work in the best interest of the people or our country.  Alan brings to the discussion, detailed information regarding monetary system problems and a simple and doable Call To Action.  As a CPA, he has over 25 years of experience in providing accounting, tax & litigation support for Bankruptcy Trustees and civil litigators.  He also specializes in analyzing the financial condition and financial affairs of bankruptcy debtors and parties in litigation. This is the first of 15 short features on our monetary system.  The series will run every Sunday evening. 

By Alan Myers

It (money) is the most important subject intellectual persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it is widely understood and its defects remedied very soon.” – Robert H. Hemphill, Credit Manager, Federal Reserve Bank of Atlanta, 1936.

What really is Money? Is it a specific commodity that is valued for its beauty, supple strength and ability to resist corrosion (gold)? Or, is Money defined more by how it enables people to complete an indirect transaction for goods or services? For me, Money is nothing more than a generally accepted item of barter. That is to say, Money is just a transaction facilitator.

To begin this discussion of Money, we must first go back 1000s of years, long before the existence of any bank or national government. Bartering began as direct transactions, trade an apple for an orange, an egg for a tomato.

Direct transactions worked only when two parties found each other and they were both willing to trade for what the other had. This type of trading would not always be easy to arrange and could be very time consuming.

From the time consuming process that was a direct bartered transaction developed the indirect transaction. It is the desire to have indirect transactions that led to the creation and development of Money. Money was created and developed by people. People interacting, bartering and trading with other people. Eventually, specific forms of Money filled the need for a generally accepted item of barter.

Instead of trying to trade with many different items of barter, the use of Money made it possible for people to trade over greater distances and acquire goods and services they would not have been able to acquire if they did not have a generally accepted item of barter, Money.

During this initial process, it was people, not banks or governments, that created and developed the concept of Money, used Money and controlled the supply of Money. The end result, little or no inflation which allowed for vibrant and thriving trading societies to develop.

One of the beneficial end results that came from barter and the Money creation process was that it allowed people to become specialists. People eventually could provide for their needs and wants without having to make or grow all that they needed. The more that people could specialize, the more civilization could advance.

The Take Away – Only People, not banks or governments, created and developed the idea of turning items of barter into Money and then use that Money to peacefully and successfully complete indirect transactions for goods and services.

Alan Myers is a San Diego CPA and forensic accountant.  For 8 years, he has dedicated himself to researching, studying and analyzing the Federal Reserve System, banking and the national debt.  He is a writer, speaker and radio commentator on these and other related topics.  You can contact Alan at: Alan Myers, CPA [email protected]

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