39 Facts About Money You Were Not Aware Of

(TomPic) – Money is a story that has evolved for centuries before becoming what it is today. While money is taking now a large part of our concerns and energy, we tend to forget that it has been created by us to (supposedly) help us. It’s in our hands to continue the story continue and write the next chapters. Before starting this kind of work, I believe in the importance of de-mystifying the story and understanding better where money comes from. I’ve listed in this article unknown and interesting facts about our currencies.

#1. Cattle (which include sheep, camels, and other livestock) are the oldest form of money: In parts of Africa, cows were used as money until the mid-1900s.

#2. The first paper money was created in China 1,400 years ago. Marco Polo wrote about it during his expeditions.

#3. During the middle age, there were two different types of currencies operating in Europe. One was a centralised royal coinage for long distance trading; the second consisted of an extensive network of different local currencies. Most of the farmers used one local currency only while some traders usually worked with both systems.

#4. The world “bank” comes from the Italian word “banca” meaning bench; benches were used as tables to make the trades. The very first bank was established in Venice in 1157.

#5. Bank notes were initially nothing more than receipts of deposit issued by the bankers in exchange of goods such as gold left at the bank. Each note represented an amount of goods in reserve. These receipts gained acceptance as a medium of exchange for commercial transactions and thus became an early form of circulating paper money.

#6. As the notes were used directly in trade, bankers observed that people would not usually redeem all their notes at the same time. Therefore, they saw an opportunity to create more notes than goods actually available in reserve to be able to invest in more projects. It was the beginning of “Fraction-Reverve Banking”.

#7. In 1971, money stopped having any equivalent in gold. All national and supra-national currencies are called “fiat currencies”. Fiat currency is money created out of nothing by the power of the word of an authority and does not have any equivalence of goods or services. All national currencies today are fiat currencies.

#8. When you make a loan, the money you receive isn’t coming from other clients’ accounts; a new number is simply punched in the computer by the banker, creating new money “out of thin air” for you and the whole economy. That’s why we say that the current money system is a “debt-based monetary system”.

#9. Private banks in the Eurozone need to have 1% of the money they create in reserve, meaning that they are allowed to create 100 € from only 1 € stored. Contrary to common belief, the European Central Bank does not create most of the euros, rather  it is private banks that have major power over money creation thus influencing the economy significantly by the decisions they make.

#10. The practice of Fractional Reserve Banking exists for all national currencies today. The reserve requirement varies according to the country, from nothing in Australia, New Zealand and Sweden to 30% in Lebanon.

#11. Fractional Reserve Banking permits the money supply to grow beyond the amount of the underlying reserves of base money available for withdrawal. That’s why during the Great Depression many U.S. banks were forced to shut down because so many people attempted to withdraw assets at the same time.

#12. There is always more money to repay to financial institutions than money in circulation within the economy. This is due to the interest rate attached to loans and is the main reason why our economy generates competition.

#13. Before lending you money, bankers try to understand your abilities to compete against other citizens. They want to ensure that you can get the extra-money needed to repay the interest rate and thus make a profit for their corporation.

#14. If you have $10 in your pocket and no debt, you’re “richer” than 25% of the US citizens.

#15. A penny costs 2.4 cents to manufacture.

#16. There is more money printed for Monopoly each year than there is for real money around the world. Today, coins and notes represent only 3% of our currencies while 97% is digital.

#17. FOREX is the biggest market of exchange with over 5,000 billions of dollars per day of transactions. It’s twice the yearly GDP of a country like France.

#18. The “real” economy uses 2% for the money available worldwide. Financial markets work with 98%. In comparison, it’s like having 22 soccer players on the pitch and over 1,000 people in the stadium betting money on their performances.

#19. In financial markets, 40% of the money goes for speculation: Items are bought not because the buyer needs them, but rather for the opportunity to resell them at a higher price.

#20. 20% of the world citizens own 94%, and 1% have 46%. The richest 85 people in the world have more financial wealth than the poorest 3.5 billion.

#21. McDonald’s makes about US$77 million per day. Apple earns US$300,000 per minute.

#22. The US energy corporations ExxonMobil and Chevron have larger economies than countries like Portugal or Ireland.

#23. The Pentagon in the U.S spends more money on war than all 50 states combined spend on health, education, welfare and safety.

#24. In July 2008 an egg cost 50 billion Zimbabwean dollars (GBP 0.17, USD 0.32) in Zimbabwe. During that period of hyperinflation, the central bank of Zimbabwe created the Z$100 trillion banknote.

#25. There’s the equivalent of US$78 trillion of money in the entire world. Almost US$2 trillion is spent by nations for military expenditures.

#26. If all the money was is distributed equally amongst all people on Earth, each person would have about US$11,000.

Foreign Currencies. Image source: epSos.de

Foreign Currencies.
Image source: epSos.de

#27. The United Nations recognizes 180 currencies as legal tender.

#28. National currency are often seen as “Yang Currency”. A Yang currency is based on hierarchy, encourages accumulation and tends to generate competition. All conventional national currencies are Yang currencies. The Yang economy tends to build financial capital.

#29. Complementary currency are often seen as “Yin Currency”. A Yin currency is based on egalitarianism, discourages accumulation and encourages cooperation among its users. The Yin economy tends to build social capital.

#30. There were only 2 complementary currencies in 1984 and nowadays there are more than 5,000 complementary currencies circulating.

#31. Complementary currencies circulate 4 to 10 times faster than national currencies, creating more wealth than national currency within a community while fostering the social relationships among locals.

#32. The “demurrage fee” is often embedded within a complementary currency design. A demurrage fee is a cost associated with holding currency over a given period. For example, the local currency SOL Violette in Toulouse loses 3% of its value if not used within 3 months. A demurrage fee favors money circulation and was already being promoted by the economist Silvio Gesell at the beginning of the 20th century.


#33. The purpose of complementary currencies isn’t to replace the national currency system, but to supplement it in order to relieve the weaknesses of an economy. As an analogy, complementary foods aren’t a substitute to a traditional diet, but rather they improve it to strengthen the whole body.

#34. The “narayan banjar” (meaning “work for the common good of the community”) is a community currency that exists in Bali since 850 AD to complement the national currency rupiah.

#35. During the Great Depression, plenty of local currencies were set up around the world, like the famousWörgl experiment in Austria. Unfortunately, most of the local currencies set up during this period were abruptly terminated by federal governments and central banks that saw there was a threat to their authority.


#36. The most successful experience of local complementary currency is probably the BerkShare, launched in 2006 and used in the Berkshire County, Massachusetts, USA. Today, BerkShare can be spent within a network of 400 locally owned participating businesses. The circulation of BerkShares encourages capital to remain within the region, building a greater affinity between the local business community and its citizens.

#37. On average it takes 3 to 5 years to launch a complementary currency project.

#38. Jean-Francois Noubel in France lives without conventional currencies (the euros) since 2011 and only with complementary currencies. You can read about his experiment here.

#39. Complementary currency doesn’t necessarily mean “local” currency. For example, the WIR is a b2b currency in Switzerland designed by small business owners who wanted their activities to be less dependent on the global economy. The Fureai Kippu in Japan was created for a specific mission: promoting care and service to the elderly. WIR and Fureai Kippu can be categorized as “functional” currencies.

This report prepared by ThomasPichon.com