The story of human migration predates the use of money. Hunter gatherers crossed continents with nothing more than what they could carry. It took thousands of generations, but eventually humans walked across all the land bridges, sailed all the seas and covered the Earth. Shortly after the world was wrapped in humankind, large-scale agriculture usurped hunting and gathering. The shift from tribal life to urban life necessitated the creation of money. With agro-urban centers sprouting like weeds, the number of people on the move decreased. Remaining migrant hunter-gatherers continued to move about and some hunter gatherer societies continued to flourish, but only on the fringes of society between the rapidly evolving agro-urban areas. Travellers needed a way to prove their worth, gain passage between enemy communities, and travel light over long distances. The movement of money continues to hold the interest of professionals and laymen today. Now they call money movements trade and economics, but once upon a time it was called the Silk Road.
The Silk Road was not a single road. It was the connection of several pre-existing trade routes that linked East Asia, as far east as Java, with East Africa and in the far west, Rome. Trade is the most powerful money moving method to date. These trading routes established long-distance commerce more than 2000 years ago. Yet, the routes were only possible because of the invention of money. Goods are needed for long journeys but transportation of large non-consumable goods, then as well as now, can prove a logistics nightmare. A purse full of gold coins is much easier to transport from Rome to Java, but it is also easier to pilfer than a caravan full of silk bolts. Gold and silver coins were measured by weight and clipped as necessary to pay for goods. An established value per gram of gold, the gold standard, maintained a trade balance between large-scale buyers and sellers. Local warehouses dealt in smaller volumes with local storekeepers using silver coins. Those storekeepers also traded in copper with individual buyers. These established trade rules remained with us, in practice, until the removal of the gold standard in 1971. Up until sometime before the Nixon shock, money moved. The exchange rules still exist today, but they fluctuate with the availability of numerous goods and the expectation of the performance of said goods in publicly traded markets. The physical money is not moving. Digital representations of money exchange hands, but the real value-items are kept under lock and key. Today’s “standards” of monetary equivalency are theoretical, not backed by tangible goods and therefore theoretically easier to pilfer.
Pirates along the Silk Road confiscated the merchant’s purses bound for home ports and redirected the money, further afield. By the time humanity bounced back from the medieval period, piracy was practiced by Royalty; they called it privateering. Piracy and war are the second most successful money moving enterprises. Perhaps the most ubiquitous pieces of pirate history are Spanish Doubloons, commonly called pieces-of-eight. From the 15th to the 18th century, the Spanish Armada controlled the Atlantic ocean with a stranglehold on the Americas, a glamourized land with fabled cities of gold. Many nations, including Queen Elizabeth I’s England, profited greatly by crown-endorsed piracy of Spanish ships transporting gold, silver and goods from the Americas to Europe. The pieces-of-eight Queen Elizabeth I commandeered helped buttress her coffers while agitating the Spanish Empire into war and eventual defeat. England rose as the next global giant and so took for herself the mantle of the golden-rule:
S/He who has the gold makes the rules.
Britannia ruled the world until the close of WWII, when the gold traded hands again. To protect Britannia from the German Fatherland’s rape, pillage, and plunder she unwillingly released her hold on widespread colonies, granting freedom while losing income. The gold was redistributed between former colonies but also captured via lend-lease policies that helped the next world-power swoop in as a last-minute Savior and take up the mantle of gold. Although piracy has a foothold in the digital realm and war continues to evolve under the watch of the current powers jockeying for domination, there are more peaceful ways for money to move.
Vacations carry money from place to place. The introduction and use of a multi-national currency, the €uro, over the past 20 years reveals interesting patterns of wealth exchange. Some northern Europeans travel frequently, enjoying vacations along the Mediterranean Sea. The pattern of €uro distribution reflects the movement of wealth from North to South. Both Greece (at least until political upheaval) and Spain benefit from these vacations. Spain is overflowing with Irish €uros. Commuting to work also helps money move. Ireland has more British €uros than Irish ones as Dubliners carry home coins as change for lunch in London. Although Brexit is sure to upend this method of observation, what we have seen so far shows that vacation travel and commuting combined prove the third fastest way for money to move. An economy with surplus creates money-in-motion, yet surplus is not a prerequisite.
In places so small or so poor they have no national currency of their own, economists can still watch money move. In the past, countries with so little funds would be colonized, but now they adopt foreign currency and maintain their independence.
“Ecuador, East Timor, El Salvador, Marshall Islands, Micronesia, Palau, Turks and Caicos, British Virgin Islands, [and] Zimbabwe” use the US dollar as their currency. “Andorra, Kosovo, Monaco, Montenegro, San Marino [and] Vatican City” use the €uro as their currency. “Antigua and Barbuda, Dominica, Grenada, St. Kitts and the Nevis, St. Lucia, and St. Vincent and the Grenadines” use the East Caribbean dollar, while “Benin, Burkina Faso, Cameroon, Central African Republic, Chad, Republic of the Congo, Equatorial Guinea, Gabon, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal, and Togo” use the CFA franc” (Chibber).
The economies of many of these nations are alive and well. Money rests in heavy coffers like those belonging to Vatican City, and flows in the streets of the Virgin Islands, but in other countries money exchanges hands at top levels of business and government but does not reach the people. Travel deficits to many of these troubled nations is determined almost exclusively, by the presence of violence and instability.
As violence and instability increase, corruption, unsavory business practices, and general theft rise. Losing money in poverty-stricken economies is why it is so difficult for nations to escape the burdens of poverty and gain social and political stability. Monetary loss turns poverty-stricken nations into bottomless pits that seem to consume money, however, that money never reaches the general populace. Multinational corporations and other nations underpay for natural resources and banking institutions move into unstable regions. Financial predatory activities allow a few individuals and organizations to decimate a country further, financially bleeding it dry. That kind of blood money, on the national level, ill-got through modern piracy, is the fourth most prevalent way money moves.
Today’s speed-of-sound transactions make the complexity of coin clipping on the Silk Road appear quaint, however, those trade rules are the basis for all modern trade exchanges. Watching the movement of money is like watching a living entity swirl around the globe. Admiration for the rich history of trade, economics, and financial systems is part of why we do what we do. We love to watch financial stories unfold, we love the history of the coins we frame, and we hope you love them too.
Until Thursday; see you on social media.
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