The Magic of Money

March 1st, 2007
by Alfonso Ebanks

[private] v5-3-Our IslandsMoney per se has not been around for more that a few thousand years but it is one of those things that always make me wonder how mankind got along without it before it was invented. Money has become a commodity against which all other commodities are measured and valued. The history of the evolution of money is fascinating.

Before money came into existence the ancient had to resort to the barter system in which a person with something to trade had to find someone that wanted it and that would have something needed by the first trader to exchange it for. This system worked fine for very small communities where each person knew the needs of the others and one could trade food items for firewood or small tools for hides and so on. As human settlements grew the barter system failed because it was very difficult to find someone with whom to make a mutually agreeable trade. The first money used could perhaps be called traditional money and it came in many and varied forms which included salt, rice, dog teeth, pieces of quartz and cowry shells, certain beads, animal skins and many other items.

When metals first appeared as money it was usually in the form of articles made from gold, silver, copper and even iron and bronze. Money as we know it came first in the form of coins with the likeness of a ruler or other important person stamped on it. There are basically three kinds of money in existence today and they are: commodity money, credit money and fiat money. Commodity money is money whose value is usually determined by the value of the material contained in it. Credit money is usually paper money with promises to be paid in a standard monetary metal; governments normally issue this paper money and the same government guarantees payment.

Fiat money is paper money that is not redeemable in any other form of money and its value is determined by government edicts. Most all money in circulation today, both paper and coins are fiat money because the material from which they are made has no intrinsic value or at least its worth is much less that its face value. Many years ago the Honduran silver lempira was commodity money with a value in silver that exceeded its face value by approximately thirty percent. Some astute politician got wind of this and those coins were sold by the boat loads.

Naturally the national treasury only received the amount corresponding to the face value of the coins. So much for some history of money so let’s get to the magic of it. A few years ago I received a phone call form a nurse that worked in a prestigious hospital on the mainland. The nurse had called to inform me that a kinfolk of mine was in danger of dying from an internal hemorrhage and needed an emergency operation to save their life. At first I did not understand what I could do to help, but upon questioning the nurse I was informed that the person would surely die unless she could come up with a goodly amount of lempiras required as down payment by the hospital. I could not believe that the hospital would condemn a person to death because of the lack of a few thousand lempiras, but that is exactly what was happening.

I knew a doctor on the staff of the hospital so I called him and told him I would pay the money, he then arranged it with administration. The person was operated on and was out of danger by the time I arrived the following morning. A little money can work magic. [/private]

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