Ask 1,000 people where do they think money comes from and 999 will reply “government”. This is an indication of just how how confused most politicians, economists and central bankers are about money and its origins.
The earliest two sorts of coins both arose independently at around 900BC, both invented by single-sail sea merchants on short hauls trade — during good weather! — along the coastline — the Mediterranean in the case of Greek merchants and the long single coastline of China.
In bartering goods-for-goods both of them had a need from time to time of leaving a balance of goods of highly-concentrated value — coins — with the counter-party after bartering goods that didn’t quite match up in value. The coins had high value because they could also be melted down and used for other purposes if necessary — gold for status ornaments, bronze for arrow-heads, etc.
Since the 2008 Crisis, many of the largest high street banks in the free world are a little safer than they were then but the total amount of debt is greater than ever and the whole world’s negative balance of trade — an impossibility in any sane monetary world — is greater than ever before. No wonder that four of the world most experienced central bankers believe that a far worse catastrophe than 2008 lies ahead of us.
Come the next catastrophe, the leading Western governments will not be able to print money as they did in 2008 because they’re already deeply in debt. If they printed any more. it would then be both a farce and mass hyperinflation in all countries in the free world.
This is when, I believe, business will re-invent money. Why should their business future and the world economy be subject to the unstable monetary world as devised by governments? Given the software talent and experience that already exists, a digital currency could be devised almost overnight.
So long as it was backed up by something of value — say, X grams of gold, or a kilowatt-hour, or the cost of a daily nutritious diet — and a totally transparent ledger maintained from day one — then we could have an entirely stable world currency radiating downwards to almost everywhere that presently uses money within a week or two.