Proverbs and sayings about May HORIZONTALLY: 2. May will deceive - in ... will leave.4 ....
Commodities are in circulation with a certain price, and money - with a certain value. The amount of money necessary for the circulation of goods during a given period of time is equal to the sum of the prices of goods divided by the average number of revolutions of the same monetary units. The amount of money necessary for the exchange of products of labor depends on the quantity of goods, the movement of their prices and the speed of circulation of money. Such is the objective law of the circulation of gold money.
Gold coins, performing the function of circulation, are in continuous motion and gradually wear out. Their weight decreases, a difference appears between the nominal and real content of the coin. However, while continuing to be in circulation, the coin still realizes the prices of commodities in accordance with its face value, since it fulfills its function as a medium of exchange in a fleeting way. As a result, the coins become a sign, a symbol, a representative of their original value. Therefore, as circulation, full-fledged coins can be replaced by tokens of value, tokens of gold.
Paper money is a token of gold. They are substitutes for gold in circulation. They are issued by the state, which endows them with a nominal gold content. However, real purchasing power paper money depends on their quantity in circulation compared with the quantity of gold required for the circulation of commodities. If the amount of paper money is equal to the amount of gold money needed to circulate commodities, then it will have the same purchasing power as gold money. If paper money is issued, say, twice as much as gold money is required to circulate a given quantity of commodities, then they depreciate. In this case, each paper currency unit will represent only half the value of the corresponding gold unit. As a result, the prices of goods will double, and money will depreciate. In our country money is not secured.
Paper money is not money broad sense, but are substitutes for money (banknotes used to be exchanged for gold at any time, but then banks abandoned this). Paper money does not completely replace money. They do not perform the last 3 functions of money.
Modern money - it can be credit money. Currently, cash is being replaced by cashless payments. More than 90% of commodity transactions occur by bank transfer. Electronic and plastic money (cards) for market consumers are a substitute for money.
In the elementary form of organization of the economy - the economy - the natural form of wealth is a natural product - a material good, which, firstly, has a use value and, secondly, is the result of labor.
The use value of a product is the usefulness of a thing, its ability to satisfy certain human needs due to certain physical or other properties.
Under the conditions of commodity production, the product of labor acquires new specific properties that make it a commodity. This product is no longer a value for the manufacturer, but for other persons, that is, it acquires a social property.
The measure of social use value is the magnitude of demand The production of a product determines the volume of supply. Things have a social use value if the supply satisfies the demand.
But can any thing be a commodity? No, only the one that is made or mediated by human labor. The fish floating in the river will turn into a commodity only after they are caught, i.e., they make certain labor costs.
And, no less important, the goods must be, not only manufactured (produced), not only manufactured for others, but also sold to other people, i.e., transferred on the basis of equivalent (equivalent) compensation. (A gift, although produced by you to meet the needs of another person, is not a commodity).
Now we can define a commodity, noting that it is a thing or service created by labor, having social value and serving for exchange (sale on the market) for another product. Things do not become commodities in and of themselves, but only when they are objects of exchange between people. Therefore, the commodity expresses the relationship between people regarding the exchange of products of labor. Exchange of goods can accept different forms, but in all cases, an exchange is an action in which we receive or give one thing in exchange for another. Hence, each commodity, when exchanged for a commodity, acquires an exchange value on the market, i.e. ability, property to exchange for other useful things in certain ratios (proportions).
Such equality, the exchange ratio is repeated every day and billions of times in practice in the market. And people usually do not think about what is hidden from their eyes: why things are equal to each other and what underlies each particular equality. But economic theory the question of how exchange ratios or exchange values are determined has been a concern since the time of Aristotle and is of concern to this day.
What is the investor primarily interested in? The answer is simple - the profitability of committed investment investments! But even the most popular methods of modern investment have both their pluses and minuses. The investor only needs to determine which decision in his case will be justified and rational.
Investment coins are no exception. This investment method also has advantages and disadvantages.
Advantages
1. Better than CHI
We can say that tangible values, even in the current virtual world, remain held in high esteem. In fact, coins are somewhat similar to depersonalized metal accounts. However, the advantages of coins are still there. At least because they are transferred to the investor (or owner). That is, they can be taken from the bank, which cannot be said about many CHI. But more often than not, precious metal ingots in the bank are not insured against the financial instability of the bank itself, and investors are also strangled by the VAT set on depersonalized metal accounts. Therefore, it is much more profitable to invest in silver or gold investment coins. The owner can store them as he likes: in the same safe deposit box, in his house in a safe or somewhere in a hiding place.
2. Publicity
The next advantage is the availability of investment coins. Many banks are engaged in their sale in Russia. Among the leaders it is worth noting Sberbank (the bank sells about one million coins a year). In fact, anyone can buy such coins. On the basis of cooperation with the Central Bank of Russia, a wide network of branches operates to service this type of investment. We are also talking about collectible coins and coins of foreign countries (for example, China, Canada, the USA, and so on).
3. No VAT
As noted above, when investing in investment coins, the depositor does not face VAT. This accordingly affects the increase in the potential profitability of investments made in coins.
Flaws
1. The difference between buying and selling
Although investing in coins does not have VAT, banks set a spread, which is the difference between buying investment coins and selling them. And the benefit from this is clearly not directed towards investors. It is also worth noting that the spread in some banks is very large (sometimes we are talking about tens of percent of the purchase price). As for commemorative coins, the spread for them is even larger.
Therefore, in order to decide what to invest in, it is worth weighing the pros and cons. Rational investment in investment coins requires endurance - this is time, patience, and free funds. It will be possible to talk about profit only when the increased value of the precious metal covers the bank spread, as well as other expenses associated with the deposit.
2. Additional costs
Such costs are usually associated with the transportation of coins and their proper storage (for example, if we are talking about bank cells).
3. Liquidity of coins
The liquidity of investment coins directly depends on their condition. As for external damage, they should not be, or they should be minimal. Banks often sell coins to owners in special protective plastic cases (called capsules). It is not recommended to open capsules in order to hold coins in the hands of the owners. Fat particles left by the hands are very difficult to remove from the metal, which can subsequently oxidize.
Money is an evolving categoryand since its inception have undergone significant changes, manifested in the transition from the use of some types of money to others, as well as in changing the conditions for their functioning and in increasing their role.
V certain areas money circulation and in different periods, under certain conditions, different types of money are used.
The predecessors of money were certain types of goods used in exchange as equivalents. Such equivalents were cattle, furs and even tobacco (in Virginia, USA).
The development of exchange, its intensity led to the allocation of money as a universal equivalent, the material basis of which was precious metals and, above all, gold. The advantage of gold money in comparison with other equivalents (cattle, furs) consisted in the homogeneity of the monetary material, its divisibility, safety from damage.
In the relatively recent past (XIX century and at the beginning of the XX century), cash was widely used in circulation in the form of gold coins(in Russia, after the monetary reform of 1895-1897, before the start of the First World War, ten-ruble and five-ruble gold coins were in circulation).
The peculiarity of such money is that they have their own value and are not subject to depreciation. This means that if there is full-fledged gold money in circulation in an amount exceeding the actual need, they go out of circulation into treasure. On the contrary, with an increase in the need for circulation in cash, gold coins freely return to circulation from the treasure. Thus, gold coins are able to adapt quite flexibly to the needs of circulation without prejudice to the owners of the money.
Under such conditions, there is no need for certain measures to regulate the amount of money in circulation in accordance with the needs of circulation, which is typical for paper banknotes.
but gold money considerable limitations:
The high cost of using gold money, which is worth much more than banknotes made from paper;
The inability to meet the need for circulation with gold money, since the need for money grows faster than the increase in gold production.
In connection with the noted, as well as some other reasons, the world gradually ceased to use gold as a material for making money.
On the contrary, they are widely used banknotes paper, including paper money and credit money (banknotes).
In the transition from the use of full-fledged money to banknotes, first of all, change for gold appeared in circulation. credit notes. In the process of replacing full-fledged money with paper banknotes, the problem arose of linking the total mass of such banknotes with the needs of circulation. The importance of solving such a problem was due to the fact that when issuing banknotes in excess of the need for them, there is a threat of their depreciation, which does not happen when using gold money.
In this regard, it is important that even small gold coins (which are also easy to lose) had significant cost, in connection with which there were difficulties when buying goods for a small amount. Therefore, a considerable part of the population (for example, in Russia in late XIX v. and at the beginning of the 20th century) preferred to use banknotes, which were freely exchanged for gold.
Under such conditions, they were constantly in circulation and were not presented for exchange for gold. paper banknotes. This made it possible to issue some of the banknotes into circulation without their full backing with gold, since there was no need to present banknotes for exchange for gold.
Later in Russia and throughout the world, the process of turning banknotes into independent variety money and at the same time decreased their association with gold.
In modern conditions in Russia, gold coins of five-ruble and ten-ruble denominations (at face value) are sold, respectively, at a price much higher than the face value. This indicates the independence of the use of banknotes.
This process covered all countries of the world, in which the exchange of banknotes for gold was stopped everywhere and the fixed gold content of the monetary unit is not applied. This completed the transition from the use of full-fledged gold money to banknotes made of paper. Credit money (banknotes) is widely distributed in cash circulation. In circulation, paper signs are also used, which are called paper money, which differ in many respects from banknotes.
Paper money. These include banknotes main feature which is not that they are made on paper, but that they are usually issued by the state (usually the treasury) to cover their expenses. The reverse flow of paper money (treasury bills) occurs when taxes and other non-tax payments are paid. Treasury notes are obligatory for acceptance for payments, including for goods, services, etc. Treasury notes issued for circulation did not have a gold backing.
The most important disadvantage of paper money consists in the fact that they enter into circulation without the necessary linkage with the needs for banknotes (to pay for goods, services and other needs). In this regard, since the issuance of paper money is due to the need for funds to cover the expenses of the state (treasury), it becomes possible to issue such money into circulation excessively (compared to the need for circulation), in which it is quite likely that depreciation of money, a decrease in their purchasing power.
The shortcomings inherent in paper money can be largely eliminated through the use of credit money.
loan money(banknotes). They are also made of paper, but the issuance of credit money into circulation is usually carried out by banks when performing credit operations carried out in connection with various economic processes (the formation of stocks of inventory items for the period of their use, etc.). By providing a loan, the bank can issue its banknotes to the borrower: after the expiration of the term for using the loan, the funds provided are subject to return to the bank to pay off the loan debt. Part of the loan debt that has arisen is repaid when cash is received by the bank (you-handle trade organizations and etc.).
The issuance of banknotes into circulation and their withdrawal from circulation occur on the basis of credit operations performed in connection with economic processes, and not in the implementation of expenses and receipt of income by the state.
The connection between the issuance of cash from the cash desks of the bank and the provision of loans, between the receipt of cash in the bank and the repayment of loan debt is not manifested in each individual loan operation, but in the total volume of operations for the provision and repayment of loans and operations for the issuance of cash and their receipts at the bank's cash desks.
Features of credit money is that their release into circulation is linked to the actual needs of the turnover. This involves the implementation of credit operations in connection with the actual processes of production and sale of products.
The loan is issued, as a rule, secured by certain types of stocks, and the repayment of loans occurs with a decrease in the balance of values. This can help link the volume of means of payment provided to borrowers with real need turnover in money. This feature is the most important advantage of credit money.
If the connection with the needs of turnover is broken, credit money loses its advantages and turns into paper banknotes.
Linking the turnover of credit money (their release into circulation and withdrawal from circulation) occurs not in the implementation of each credit operation, but in their totality, in the whole of the national economy.
Bank cash can be returned trading company, which will contribute to the bank the proceeds used to pay off the debt that arose when obtaining a loan to pay for imported goods (on the terms of non-cash transfers).
Most significant difference between different types of money credit money (banknotes) and paper money, consists of features of their release into circulation. So, banknotes are issued into circulation in connection with credit operations performed in conjunction with the actual processes of production and sales of products, paper money enters circulation without such linkage.
Important in their meaning and consequences of their application are non-cash money, the movement of which is recorded in the form of records on customer accounts in the bank (the turnover occurs without currency notes).
The expanding use of such money is due to a number of their advantages, which include, first of all, the reduction in the costs of cash circulation by reducing such costs as printing banknotes, their forwarding, recalculation, and protection. Of considerable importance is the prevention of the possibility of theft of banknotes, etc.
Features of non-cash money is that transactions with their use are made in credit institutions by means of entries on the accounts of participants in settlement transactions. In such operations, the turnover of cash is replaced by credit operations.
There is never too much or too little money - there is exactly as much money as we need. At a low level, the basic needs of all people are the same - food, protection from cold or heat, places to sleep and rest. There is enough for everyone, and to meet these needs, very little money is needed. But a person is not content with little: he constantly wants more and more - opportunities are growing, needs are growing, requests are growing, and more and more money is needed. As a result, a person falls into this vicious circle his desires and money and is enslaved by them.
Also, an excess of money is harmful to the country, as it leads to inflation. But the lack of money is also dangerous. For example, in Russia in the first half of 1992, prices increased tenfold and the money supply doubled. At the same time, the velocity of circulation of money fell: instead of the previous 15 days, money traveled from bank to bank for 30 days or more, and the turnover slowed down several times.
In Russia, failures were inevitable due to lack of money. And so it happened.
The balance of the money supply is determined by the Newcomb-Fisher formula, which brings the money supply in accordance with the commodity. It follows, in particular, that inflation is an excess of money supply. This is what we observe. That is, inflation proves an excess of money supply. Where did he come from? From unbalanced exports. Export from Russia exceeds import twice. As a result, there is an accumulation of foreign currency in gold reserves and the Stabilization Fund with a stable ruble exchange rate (it would be possible to strengthen the ruble instead of accumulating gold reserves). The desire to keep the ruble from strengthening (this is necessary to maintain the competitiveness of the economy) forces the Central Bank to buy up foreign currency and issue rubles for this. It is this issue that fills the economy with extra money.
"The fundamental thing in this situation is that the needs of the domestic economy in money supply completely dependent on exports that bring dollars to the currency exchange. How much oil was traded - so much money in the economy.
The main advantage of electronic money over conventional non-cash payments is the extremely low cost of transactions, especially internal ones (transfers from wallet to wallet). The low cost of transactions makes it possible to use electronic money for micropayments, for which ordinary non-cash funds hardly applicable. This advantage has become more and more important over time.
The most well-known advantage of electronic money is the anonymity of its use, comparable to cash, as well as the very simple entry into the system. You do not need to go to the bank, conclude any agreements, provide documents, etc. You can get your own wallet and receive or send payments almost instantly without getting up from your computer. This advantage basically led to the widespread use of electronic money, including in Russia. At the moment, this advantage is somewhat losing its strength, mainly due to the attempts of the state to ensure the regulation of the circulation of electronic money, which to some extent will equalize them with bank accounts, and deprive most of the anonymity.
Electronic money transactions, unlike non-cash payments, have significantly lower security requirements, which makes it easy to use them, for example, in mobile commerce.
Another significant advantage of electronic money is that almost all transactions with them take place online and take very little time. In Russia, electronic money occupies a special position, because due to the very low level of penetration of personal banking services at the moment, electronic money is the only method of non-cash payments used for a very large number of people.
The main instrument of retail payments around the world is known to be paper money or cash, and they are likely to remain the main means of payment for a long time to come.
Many economists are inclined to believe that in the future paper money, banknotes and checks will disappear altogether and be replaced by electronic interbank transactions. The money will remain, but will become “invisible”.
Electronic money is a new phenomenon in money circulation, the process of destafiation of money, i.e. the disappearance of material means of circulation of payment.
Banking system
Banking system - aggregate various kinds national banks and credit institutions operating under the general monetary mechanism. Includes the Central Bank, a network of commercial banks and other credit and settlement centers. The Central Bank conducts the state issuing and foreign exchange policy, is the core of the reserve system. Commercial banks carry out all types of banking operations.
The concept of "system" is widely used modern science. It correlates with the study of the diverse phenomena of nature and community development. However, the term "system" has not received a clear definition. Most often, the word "system" refers to the composition of something. V federal law"About the Central Bank Russian Federation(Bank of Russia)” (1995) notes that the banking system includes the Central Bank, credit organizations and their associations. Such an interpretation is not accidental (“system” from Gr. system - a whole made up of parts, a connection).
Below are the main properties and features that characterize the banking system.
1. The banking system, first of all, is not a random variety, a random collection of elements. It cannot mechanically include entities that also operate on the market, but are subordinated to other goals.
2. The banking system is specific, it expresses properties that are characteristic of itself, unlike other systems operating in national economy. The specificity of the banking system is determined by its constituent elements and the relationships that develop between them.
When the banking system is considered, then, first of all, it means that it includes banks as a constituent element, which, as monetary institutions, give a "color" to the banking system.
3. The banking system can be represented as a whole, as a variety of parts subordinate to a single whole. This means that its individual parts (different banks) are connected in such a way that they can replace one another if necessary. If one bank is liquidated, the whole system does not become incapacitated - another bank appears that can perform banking operations and services. At the same time, new parts may join the banking system, replenishing the specifics of the whole.
4. The banking system is not in static state On the contrary, it is constantly in dynamics. Two points stand out here.
Firstly, the banking system as a whole is constantly in motion, it is supplemented with new components, and also improved.
Secondly, new connections are constantly emerging within the banking system. The interaction is formed between the central bank and commercial banks, as well as between them. Banks participate in the market of interbank loans, offer "long" and "short" money for sale, buy financial resources from each other. Banks can provide other services to each other, for example, participate in joint projects to finance enterprises, form associations and unions.
5. The banking system is a "closed" system. In the full sense, it cannot be called closed, since it interacts with external environment, with other systems. In addition, the system is replenished with new elements corresponding to its properties. However, it is “closed”, because, despite the exchange of information between banks and the publication by central banks of special statistical collections, information guides, bulletins, there is a banking “secret”. By law, banks do not have the right to provide information about the balance of funds in accounts, about their movement.
6. The banking system is "self-organizing", since a change in the economic environment, the political situation inevitably leads to an "automatic" change in the policy of the bank.
7. The banking system acts as a controlled system. The Central Bank, pursuing an independent monetary policy, in various forms accountable only to parliament or the executive branch. Business banks, being legal entities, operate on the basis of general and special banking legislation, their activities are regulated by economic standards established by the central bank, which controls the activities of credit institutions.
The banking system of any country was formed as a result of the development of the national economy, at present it has become the center of the economic mechanism and interacts with all sectors of the economy, with the population, public authorities, exerting a certain influence on them. The effective functioning of the banking system is a catalyst for the overall development of the national economy.
banking systems in different countries formed differently. Historical, political, ethnic, religious and even climatic factors influence this process. Despite this, there are certain general principles building the banking system at the national level.
First, there is a legislative separation of the functions of the central bank and all other banks. In practice, this gives rise to a two-tier banking system. The central bank, being at the top level, performs such important functions as:
Issue of cash means of payment;
The "bank of banks" function
Government banker;
Monetary regulation of the economy.
The banking system, like any system, must work stably and efficiently. Stability implies the functioning of banks in accordance with their goals and objectives. It is violated if individual banks experience financial difficulties that develop into bankruptcy. The situation when there is a series of bank failures and disruption of the entire banking system is called a banking crisis.
Western economists have established a relationship between the efficiency and stability of the banking system, which is expressed in the fact that it is impossible to have maximum stability and maximum efficiency. The more efficient the banking system, the better it allocates capital in accordance with the relative rate of return hierarchy that exists in the economy.
Conclusion to Chapter II
In this chapter, we looked at the government's monetary policy, the advantages and disadvantages of money, and the banking system.
Most economists view monetary policy as an integral part of national stabilization policy. Indeed, there are several specific arguments in favor of monetary policy.
1. Speed and flexibility.
2. Isolation from political pressure.
3. Monetarism.
The banking system of the Russian Federation consists of 2 levels: the Central Bank of the Russian Federation and credit institutions (commercial banks and non-bank credit institutions). The Central Bank of the Russian Federation (CBR) is legal entity, carries out its expenses at the expense of its own income and is not registered in tax authorities. Authorized capital and other property of the Central Bank of the Russian Federation is federal property. Making a profit is not the purpose of the Bank of Russia.
The main objectives of the activities of the Central Bank of the Russian Federation are: 1. Protecting and ensuring the stability of the ruble, including its purchasing power and exchange rate against foreign currencies. 2. Development and strengthening of the banking system of the Russian Federation. 3. Ensuring the efficient and uninterrupted functioning of the settlement system.
The need for money is so great that it is invented in almost every society, with the exception of the most primitive. Of course, under a subsistence economy, when goods were exchanged for goods, the need for money was not as acute as under a developed market. And, nevertheless, even the most primitive civilizations, in the most God-forgotten corners of the Earth, created their own types of money. The role of money, the standard of all exchanges, always fell to the commodity for which there was the greatest demand or which was in abundance.
Historians have found evidence that a variety of goods played the role of money among the peoples of the world: salt, cotton fabrics, copper bracelets, gold dust, horses, shells, and even dried fish.
"Money" is just a generalized name for special items used by mankind to facilitate trade and solve other problems. economic problems.
In this regard, we can imagine the following evolution of different types of money:
1) commodity money (nominal value corresponded to their real value)
Properties of commodity-accounting equivalents:
. multi purpose,
. persistence,
. transportability,
. low costs.
Flaws:
did not have divisibility, homogeneity.
Properties of commodity-weight equivalents:
. weight characteristics,
. divisibility,
. connectivity,
. homogeneity.
2) metallic money
Metal money went through two stages in its development:
1) Ingot period
Payments were made by weighing individual pieces of ore (corresponding to monetary raw materials), and then these ingots were counted, i.e., two operations were typical for this period:
. weighing;
. payment.
This payment method is called penzatorny. He had certain inconveniences and high transaction costs.
2) Monetary period
There was no need to weigh and payment was carried out by transferring minted coins from one hand to another. This payment method is called charter.
With the penza method, there was a correspondence of money by weight and by account, i.e. the intrinsic value of money corresponded to their face value - this situation was called monetary parity.
The state imposed an assay mark on a piece of metal, which guaranteed its weight and standard. By the way, the metal did not have to be state-owned - there was also open production coins, when everyone could bring mint metal to the mint and, for a fee, convert it into coins of standard fineness and weight - free minting of coins. With closed coinage, the right to mint coins belongs only to the state.
The cost of the coin was composed of the cost of coin metal, the cost of additional raw materials, the cost of workers mint.
Over time, the idea arises that the coin is needed only for exchange, so there is no need for it to be full-fledged - after all, the name of the monarch standing on it gives it value, making it obligatory to be accepted into the account according to the declared value.
In the future, this idea was denounced in a simple and practical form - if you do not report a little metal, no one will notice. This practice was called defacing coins. Impurities of base metals in the content of the coin are called ligature. The coin was still accepted into the account at face value - as a result, the state actually reduced its costs by making payments in a non-weight coin.
Thus, if the internal value of the coin is less than the face value, then this made it possible to receive share premium - seigniorage.
However, attempts were made to simultaneously circulate coins that contained more precious metal with similar ones with a lower content. But such attempts inevitably led to the unauthorized removal of the best coins from circulation and leaving only defective ones in circulation. The best, with the benefit of the smart and not afraid of state prohibitions, were melted down into ingots, converted into jewelry, sold at the price of silver in large quantities abroad. This inevitability has received in the economic literature the name of the law of Copernicus - Gresham, after the famous astronomer Nicolaus Copernicus and the English merchant of the 16th century. Thomas Gresham, who independently described this phenomenon and substantiated its regularity.
So, if the intrinsic value of the coin is greater than the face value, then the coin leaves the sphere of circulation, transforming into an ingot, or goes into a treasure.
The balance between the intrinsic value and face value, on the one hand, made the circulation of coins stable, and on the other hand, made minting coins unprofitable.
When the minting of coins became the monopoly of the state, the government fixed the payment power by directive for a certain coin (the reform of E.F. Kankrin, S. Yu. Witte).
In this way, basic properties metallic money were:
. homogeneity,
. divisibility,
. portability,
. persistence,
. concentration of great value in a small volume.
The disadvantage of using precious metals was that such money is very heavy and difficult to transport. Among the disadvantages of gold money, the following should be noted:
. the high cost of using gold money;
. the inability to meet the need for circulation with gold money, since the demand for them is growing faster than the increase in gold production.
Commodity and metal money were also called full-fledged money, as they had their own value.
Due to the shortcomings of metallic money around the world, gold has gradually ceased to be used as a material for making money.
3) Issuance money
Emission money is called defective money - this is such money, the purchasing power of which exceeds the intrinsic value of the goods.
Depending on the issuer and the purpose of the issue, issue money is divided into paper money and credit money.
Paper money appears in the form of a billon coin and in the form of a treasury note.
Treasury bills - established by the government as legal tender (meaning that everyone is required by law to accept them for debt), but not convertible into coins or precious metals. They were representatives of full-fledged money, their value was determined by the amount of collateral they represented, as well as the credibility of the issuer.
The advantage of paper money is that it is much lighter than coins and precious metals, but it is accepted as a medium of exchange only if the authorities that issued it are trusted, and also if the printing art has reached such a level that it is extremely difficult to fake them. Issuers of paper money are either the state treasury or central banks. In the first case, the Treasury directly uses the issue of paper money to cover its expenses. In the second case, it does so indirectly, i.e., the central bank issues fiat notes and lends them to the state, which allocates them to its budget expenditures.
Specificity of paper money:
1) replace full-fledged money as a means of circulation;
2) are mandatory for admission;
3) the value of paper money is based on trust in the government and future revenues to the treasury;
4) the issuer of this money is the Treasury, the amount of their emission is determined by the needs of the treasury;
5) paper money is inexchangeable;
6) paper money is based on the redistributive function of the state.
It must be emphasized that according to economic nature paper money is characterized by instability of circulation and depreciation.
The instability of paper money circulation is connected, first of all, with the fact that the issue of paper money is regulated not so much by the need for trade in money, but by the constantly growing needs of the state in financial resources especially to cover the budget deficit. In addition, there is no mechanism for the automatic withdrawal of paper money from circulation.
An increase in the paper money supply means an excessive issuance of paper money, which leads to their depreciation. The most typical is the inflationary depreciation of paper money due to their excessive issue. The depreciation of paper money may also be associated with an unfavorable balance of payments, a depreciation of the national currency. Under these conditions, paper money, of course, is not suitable for performing the function of a treasure.
The shortcomings inherent in paper money can be largely eliminated through the use of credit money.
Credit money is a form of money generated by the development of credit relations. The essence of a loan can be described as the transfer by the lender of the loaned value to the borrower.
The specifics of credit money.
1) The function of money is performed not by the commodity-gold, but by a specific commodity called loan capital, the form of manifestation of which is credit money.
2) They are determined not by the sphere of commodity circulation, but by the circulation of capital.
3) A more abstract and homogeneous form of money.
4) Governed by laws other than real money:
- gold circulates, because has intrinsic value, and credit money, since have a representative value;
- the cost of gold is determined by the cost of monetary raw materials, and the cost of credit money - by the value (quantity) of their security;
- when money had an intrinsic value, the change in prices depended: firstly, on the change in the value of the commodity, and secondly, on the change in the value of gold;
- at present, the change in prices depends: on the change in the cost of goods; from changes in the value of collateral; from a change in the degree of trust;
money is an order to receive the equivalent.
Credit money has gone through the following evolution: bill, banknote, check, credit cards.
The need to combine various national monetary systems gave rise to a special profession - money changers, today these people would be called money changers. This is how the bankers appeared. In the XIII century. European bankers came up with the idea of expanding the range of services. For example, a person going on a long journey would certainly take money with him, while risking his savings and because of them, at times, his very life. He was offered to leave the money to the banker, to receive in return a letter to the banker's colleague in another country - a bill to which the banker's overseas acquaintance issued the required amount. It is clear that both banker partners earned something from this, and the client received security. Strictly speaking, this invention is somewhat older - it was known to Arab and Chinese merchants of the 9th - 10th centuries. The banker could also leave coins for storage and receive a receipt from him, which guaranteed their return at the first request of the bearer - a certificate of deposit. Somehow, by themselves, certificates of deposit began to act in the process of money circulation, i.e. be used as money. Bills of exchange began to act as money, which began to be transferred to other people in payment. The first bill of exchange is known at the beginning of the 15th century. These money substitutes had a backing in the banker's chest in the form of full-fledged metal coins.
So, a bill is a written promissory note, which indicates the amount of money and the timing of its payment by the debtor. A bill of exchange obligation has three features: abstractness, indisputability, negotiability. The abstract nature of the bill means that it does not indicate the reasons that caused its appearance. Indisputability indicates that the receipt of money from the debtor who signed the bill can be carried out in a forced, legal order if by the appointed date he does not pay the amount specified in the bill. The negotiability of a bill allows it to be transferred to another person, the transfer of a bill is formalized by a transfer signature - an endorsement. In this case, the person who signed the bill assumes the obligation to pay in the event of the drawer's insolvency, i.e. the person who put the bill into circulation. Therefore, the more signatures on a bill, the higher its stability.
A banknote is a debt obligation of a bank (a bank bill).
Banknotes were first issued at the end of the 17th century. based on rediscounting of private commercial bills.
Initially, the banknote had a double security: a commercial guarantee, since it was issued on the basis of commercial bills of exchange related to trade, and a gold guarantee, which ensured its exchange for gold. Such banknotes were called classical, had high reliability and stability. The central bank had a gold reserve for exchange, which excluded the depreciation of the banknote.
The modern banknote has essentially lost both guarantees: not all bills rediscounted by the central bank are backed by commodities, and there is no exchange for gold.
Currently, the banknote is issued by the central bank by lending to the state and various credit organizations, including the rediscount of bills.
Unlike a bill of exchange, a banknote can serve as a perpetual debt obligation, has a state guarantee, since it is issued by the central bank. A bill of exchange is issued into circulation by an individual entrepreneur and has an individual security.
It should be noted that the transportation of both paper and credit money becomes too expensive as soon as it comes to a large amount - they take up too much space. To combat this problem, another step was taken in the evolution of the payment system, associated with the development of the modern banking system: checks entered circulation.
Check - a written order of a person who has a current account on the payment by the bank of a sum of money or its transfer to another account. Checks are a form of promissory note, payable on demand, which makes it possible to conclude purchase and sale transactions without the need to carry large sums of cash with you anywhere and everywhere. The introduction of checks was a major innovation that dramatically increased the efficiency of the payment system. Very often counter payments cancel each other out; without checks, this process would be accompanied by the movement of large sums of money. In the presence of checks, payments that cancel each other can be made by offsetting checks, i.e. no cash at all. Thus, the use of checks reduces the transport costs associated with the passage of payments, and increases economic efficiency. Another advantage of checks is that they can be drawn for any amount up to all the money in the account, making large purchases very easy. The advantage of checks is that losses from theft are significantly reduced, and, in addition, they are simply very convenient when paying for purchases.
However, the use of checks has its drawbacks. First, sending a check takes certain time, which becomes a serious problem if you need to make a payment to someone who is far away, and at the same time the payment must be made quickly. Also, if you have a checking account, it will take several business days before the bank will allow you to write checks against the funds you have deposited into the account. And if you urgently need cash, then this feature of check circulation can somewhat upset your plans. Secondly, the paperwork for servicing all checks is quite expensive.
With the development of computer and advanced telecommunication technologies, it became possible to abandon all paperwork by switching to an electronic funds transfer system, i.e. repayment or transfer of debt using electronic money.
Electronic money is money in bank computer memory accounts. In essence, in such transactions, non-cash transactions are made. cash settlements with the only difference that instead of the order in cash with the help of documents drawn up on paper (orders, checks), with electronic technology, the corresponding orders are executed by means of electronic signals.
Based on the spread of computers in banking, it became possible to replace checks with plastic cards. A plastic card is a plastic plate containing encrypted information on a magnetic strip or an embedded microchip, which gives the key to a special card account in a bank.
So, we can distinguish the following differences between credit money (banknotes) and paper money:
1) paper money is issued by the Treasury, provided with future budget revenues, banknotes - by the Central Bank in the process of lending;
2) the banknote after the expiration of the loan period is returned to the issuing bank, paper money - remain in the sphere of circulation;
3) a banknote is exchanged for metal, paper money is not exchanged for metal;
4) the elasticity of the banknote is higher than paper money.
