Concept and types of money

As noted by Edwin G. Dolan, Colin K. Campbell: "Money - it is a means of payment for goods and services, a means of measuring the value, as well as a store of value."

OI Lavrushin deeper approach to the definition of money: "Money - economic category, which are shown and which are built with the participation of public relations: the money acts as an independent form of exchange-value, medium of exchange, payment and accumulation." 
  
Money represents an emerging category, and since its inception has undergone significant changes, manifested in the transition from the use of some types of money to others, as well as a change in the conditions of their functioning and to enhance their role. 
In some areas of cash flow and at different times, under certain conditions, there are different kinds of money.

The forerunners of money were some goods that were used in the exchange as equivalents. Such equivalents were cattle, furs, and even tobacco (in the state of Virginia, USA).

The development of the exchange, the intensity resulted in the allocation of money as the universal equivalent, the material basis of which were precious metals, especially gold. The advantage of gold money compared to other equivalents (cattle, furs) consisted of uniformity in monetary material, its divisibility, safety from damage.

In the relatively recent past (XIX c., And at the beginning of XX century.) In circulation is widely used currency in the form of gold coins (in Russia after the currency reform of 1895-1897. Before the First World War in the back were a ten and five-ruble gold coins ).

The peculiarity of this money is that they have their own value and do not have impaired. This means that in the presence of high-grade gold money in circulation in excess of actual need, they go out of circulation in the treasure. Conversely, when demand is increased turnover in cash gold coins back into circulation free of treasures. Thus, the gold coins are able to be flexible enough to adapt to the needs of turnover without prejudice to the owners of money.

Under such circumstances, there is no need for specific measures to regulate the money supply in circulation in accordance with the needs of turnover, which is characteristic of paper money.

However, the gold coins are inherent considerable disadvantages:

• Use the high cost of gold money, which cost much more than the bank notes, made from paper;

• inability to satisfy the needs of turnover gold currency as the need for money is growing faster than the increase gold production.

In connection with base and some other reasons worldwide gradually stopped using gold as the material for making money.

On the contrary, became widely used banknotes from paper, including paper money and credit money (bank notes).

In the transition from the use of high-grade money to the bank notes first appeared in the back of loose change for gold credit cards. In the process of replacing full money paper currency signs have a problem linking the total weight of such banknotes to the needs of the turnover. The value of the solution of such a problem was due to the fact that the issue of banknotes in circulation in excess of the need for them there is a threat of impairment that does not happen when using a gold money.

In this respect, it is important that the gold coins even of small size (which are also easy to lose) had considerable value, in connection with which there were difficulties when shopping for a small amount. Therefore, a large part of the population (for example, in Russia in the late XIX century., And at the beginning of XX century.) Preferred to use the money signs that are freely exchanged for gold.

Under such conditions are constantly in circulation and were not brought to the exchange of gold paper money. This allowed the release into circulation banknotes part without the full support of their gold, because it does not need arose presentation currency to be exchanged for gold.

Later in Russia and around the world continued the process of converting currency in an independent form of money and at the same time decreasing their relationship with gold.

Under current conditions in Russia five-ruble gold coins and ten-esteem (at face value), respectively, are sold at a price much higher than the face value. This demonstrates the independence of the use of bank notes.

This process has affected all countries of the world in which everywhere was discontinued exchange banknotes for gold and apply a fixed gold content. This concluded the transition from the use of high-grade gold money to the bank notes made of paper. In the cash circulation is widely distributed credit money (bank notes). In the back of used paper and signs, which are called paper money, which differ in many respects from the bill.

Paper money. These include bank notes, the main feature of which is not what they are made on paper, but the fact that they are usually issued by the government (usually the Treasury) to cover its expenses. Reverse flow of paper money (treasury bills) occurs at the payment of taxes and other non-tax payments. Treasury notes must be accepted for payment, including for goods, services and other Treasury notes, which were issued into circulation, had no gold backing.

The major drawback of paper money is that they enter the market without the necessary linkages with the need for banknotes (to pay for goods, services and other needs). In this regard, since the issue of paper money is due to the need for funds to cover the cost of government (Treasury), it becomes possible excessive (compared with the need to turn) the release of such money into circulation, where it is likely devaluation of money, reducing their purchasing power.

Disadvantages of paper money can be largely eliminated by the use of credit money.

Credit money (banknotes). They are also made of paper, but the issuance of credit money is usually made when the banks are lending operations carried out in connection with the various economic processes (formation of stocks of inventory at the time of their use, etc.). By providing a loan, the bank may issue its notes to the borrower: After the expiry of the term of use loan funds provided shall be returned to the bank to repay the loan debt. Part of the loan debt is paid off occurred at entry into the pot of cash (proceeds trade organizations, etc.).

Issuance of banknotes and withdrawal from the market place on the basis of credit operations carried out in connection with business processes, rather than the implementation of expenditure and income state.

Communication between the issuance of cash from banks and the provision of loans between receipt of cash in the bank and the repayment of loans is shown not to each individual loan transactions, and the total volume of transactions for the provision and repayment of loans and cash withdrawal transactions in cash and cash receipts in bank cashier.

Feature of credit money is that their release into circulation is linked to the actual needs of the turnover. This would include credit transactions in connection with the actual processes of production and sales. The loan is issued, usually secured, which are certain types of stocks, and the repayment of loans occurs at lower residual values. Because of this can be achieved by linking the payment of funds provided to borrowers with a valid need for a turnover of money. This feature is the most important benefit of credit money.

In case of violation due to the credit needs of the turnover of money loses its advantages and turn into paper money.

Linking the turnover of credit money (their release into circulation and withdrawal from the market) does not occur in the implementation of each credit transaction, and in their entirety, to the entire national economy.

Cash in the bank's cash can be returned trading company that will make the bank proceeds used to pay off debts incurred in obtaining a loan to pay for imported goods (in terms of non-cash payments).

The most significant difference between such money as credit money (bank notes) and paper money is in the peculiarities of their release into circulation. So, banknotes are issued in connection with credit operations carried out in conjunction with the actual processes of production and sales, paper money comes into circulation without such a link.

Important in its significance and consequences of their use are non-cash money circulation, the movement of which is fixed in the form of records of customer accounts at the bank (turnover occurs without currency). Increasing use of money due to a number of advantages, among which is the first implementation of the cost reduction of cash flow by reducing costs such as printing of banknotes, their transmission, conversion, security. Considerable importance is the prevention of the possibility of theft of bank notes, etc.

Feature of non-cash circulation of money is that the operations are performed in their use of credit institutions through records on participants' accounts of settlement transactions. In such operations are replaced by the turnover of cash lending operations.

Non-cash payments are made in accordance with the established rules, compliance with which

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