Heres

a bit about the history of banking

1. Banking began at about 2000BC of the ancient world when merchants made
grain loans to farmers and traders started carrying goods between cities within
the areas of Assyria and Babylonia.
2. In ancient Greece and during the Roman Empire, lenders based in temples
made loans and started accepting of deposits. Because during this time
temples were considered especially safe depositories
a. as they were sacred places watched over by gods so apparently no
one would steal anything
3. In 600 B.C., Lydias king alyattes minted the first official currency in Asia
Minor (current-day Turkey),
- The coins were made from electrum, a mixture of silver and gold that occurs
naturally and stamped with pictures that acted as denominations.
a. Thanks to her people no longer need 2 owls and a snake to buy goods.
4. This lead to improvements in both internal and external trade
During this time period the value of a coin depended upon its weight and
metal content. Coins had to be the correct weight and fineness.
5. The earliest genuine European banks, dealt neither in goods nor in bills of
exchange but in gold and silver coins and bullion,
6. The concept of bank money originated with the Amsterdamsche
Wisselbank (the Bank of Amsterdam), which was established in 1609
7. Money is one of the greatest inventions of civilization
8. Till today money is seen as a vital medium of exchange to complete
transactions to purchase goods and services.
9.

There are several factors that affect money and consumption - for example
Inflation

10. Inflation is the increase of prices of goods and services. Therefore the higher
the inflation rate the less you can consume with your money
11. extreme cases of inflation is known as hyperinflation - a rise in price
exceeding 50% per month.
12. One of the extreme cases of hyperinflation struck in Germany between
January 1922 and November 1923 the average price level increased by a
factor of 20 billion

13. So when people went out to eat at a restaurant, the price of their meal doubled
even before they finished eating
14. What did Germany do
a. They decided to use notes of money as wallpaper
b. Oh and to children money was a toy, as they would play with piles of
it.
15. Zimbabwe had a different approach they began using money as toilet paper
16. Well they might as well because hyperinflation leads to the countrys currency
loosing its value to the point where its almost worthless this is known as
devaluation of currency
17. A country can devalue its own currency by selling/releasing more of it
18. Not having enough money also has a negative impact
a. One of the reasons why the civil war broke out in England in 1642 was
because of Charles' lack of money.