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by Divya trivedi and Milan kumar kathiria (group)

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In this we are going to explain that how money was origin. from where this all started and how the money started to build up. Even we will have explained how banks actually works. This also shows that how

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This video describes a short story about how the paper money comes into the existance and how the bartery system came to an end. In this video it shows that how money became the intermediate unit for the exchange of the goods.

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The History of Paper Money - Origins of Exchange - Extra History - Part 1

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this image shows how the initially exchange were done as barter system for things. Meanwhile it has changed things to animals to gold to coins to cards and at the end digital money. It is very good and easy example for understanding the chain of origin og money and the system of change in form of money.

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THE ALL MONEY IS  NOT COMING FROM THE MINT BUT IT IS GATHERED BY SIGNING OF SOMEONE AS A PLEDGE WHICH THEY PROMISE TO PAY . THIS VIDEO EXPLAINS THAT HOW BANK WORKS AND FROM WHERE THE BANK GETS MONEY. EVEN IT SAYS THAT THE BASIC TRUTH IS TILL THE  BORROWER SIGN THE BANK WOULD NOT HAVE ANYTHING. IT EXPLAINS THE ACTUAL SENARIO OF HOW MONEY AND DEBT ARE RELATED TO EACH OTHER

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How MONEY & BANKING Really works - Part 1 (3 of 5)

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in this videoa the banking has been explained in the simple steps.
it explains that banks gives money which even does not exist.
the reserved ration is found to be 9:1 which has been explained in details with very simple way.
It is quiet lengthy video but it is the best video explaining everything into the simpliest word.

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The Biggest Scam In The History Of Mankind - Hidden Secrets of Money 4

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This image explains the stepwise circulation of the money from it is generated to the debt

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This image very well descibes the origin of money, when it was founded in different regions, ancetors and bank, and types of banking system currently used. Everything was divided in individual section for easy unnderstanding.

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What is money? By definition, it's something of value. But over the last 10,000 years, the material form that money has taken has changed considerably-from cattle and cowrie shells to today's electronic currency. Here, get an overview of the history of money.

Editor's Note: The dates below mark the approximate start of use.

In the Beginning: Barter

Barter is the exchange of resources or services for mutual advantage, and the practice likely dates back tens of thousands of years, perhaps even to the dawn of modern humans. Some would even argue that it's not purely a human activity; plants and animals have been bartering-in symbiotic relationships-for millions of years. In any case, barter among humans certainly pre-dates the use of money. Today individuals, organizations, and governments still use, and often prefer, barter as a form of exchange of goods and services.

9000 - 6000 B.C.: Cattle

Cattle, which throughout history and across the globe have included not only cows but also sheep, camels, and other livestock, are the first and oldest form of money. With the advent of agriculture also came the use of grain and other vegetable or plant products as a standard form of barter in many cultures.

1200 B.C.: Cowrie Shells

The first use of cowries, the shells of a mollusc that was widely available in the shallow waters of the Pacific and Indian Oceans, was in China. Historically, many societies have used cowries as money, and even as recently as the middle of this century, cowries have been used in some parts of Africa. The cowrie is the most widely and longest used currency in history.

1000 B.C.: First Metal Money and Coins

Bronze and Copper cowrie imitations were manufactured by China at the end of the Stone Age and could be considered some of the earliest forms of metal coins. Metal tool money, such as knife and spade monies, was also first used in China. These early metal monies developed into primitive versions of round coins. Chinese coins were made out of base metals, often containing holes so they could be put together like a chain.

500 B.C.: Modern Coinage

Outside of China, the first coins developed out of lumps of silver. They soon took the familar round form of today, and were stamped with various gods and emperors to mark their authenticity. These early coins first appeared in Lydia, which is part of present-day Turkey, but the techniques were quickly copied and further refined by the Greek, Persian, Macedonian, and later the Roman empires. Unlike Chinese coins which depended on base metals, these new coins were made from precious metals such as silver, bronze, and gold, which had more inherent value.

118 B.C.: Leather Money

Leather money was used in China in the form of one-foot-square pieces of white deerskin with colorful borders. This could be considered the first documented type of banknote.

A.D. 800 - 900: The Nose

The phrase "To pay through the nose" comes from Danes in Ireland, who slit the noses of those who were remiss in paying the Danish poll tax.

806: Paper Currency

The first known paper banknotes appeared in China. In all, China experienced over 500 years of early paper money, spanning from the ninth through the fifteenth century. Over this period, paper notes grew in production to the point that their value rapidly depreciated and inflation soared. Then beginning in 1455, the use of paper money in China disappeared for several hundred years. This was still many years before paper currency would reappear in Europe, and three centuries before it was considered common.

1500: Potlach

"Potlach" comes from a Chinook Indian custom that existed in many North American Indian cultures. It is a ceremony where not only were gifts exchanged, but dances, feasts, and other public rituals were performed. In some instances potlach was a form of initiation into secret tribal societies. Because the exchange of gifts was so important in establishing a leader's social rank, potlach often spiralled out of control as the gifts became progressively more lavish and tribes put on larger and grander feasts and celebrations in an attempt to out-do each other.

1535: Wampum

The earliest known use of wampum, which are strings of beads made from clam shells, was by North American Indians in 1535. Most likely, this monetary medium existed well before this date. The Indian word "wampum" means white, which was the color of the beads.

1816: The Gold Standard

Gold was officially made the standard of value in England in 1816. At this time, guidelines were made to allow for a non-inflationary production of standard banknotes which represented a certain amount of gold. Banknotes had been used in England and Europe for several hundred years before this time, but their worth had never been tied directly to gold. In the United States, the Gold Standard Act was officialy enacted in 1900, which helped lead to the establishment of a central bank.

1930: End of the Gold Standard

The massive Depression of the 1930s, felt worldwide, marked the beginning of the end of the gold standard. In the United States, the gold standard was revised and the price of gold was devalued. This was the first step in ending the relationship altogether. The British and international gold standards soon ended as well, and the complexities of international monetary regulation began.

The Present:

Today, currency continues to change and develop, as evidenced by the new $100 U.S. Ben Franklin bill.

The Future: Electronic Money

In our digital age, economic transactions regularly take place electronically, without the exchange of any physical currency. Digital cash in the form of bits and bytes will most likely continue to be the currency of the future.

This feature originally appeared on the site for the NOVA program Secrets of Making Money.

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What is money? By definition, it's something of value. But over the last 10,000 years, the material form that money has taken has changed considerably-from cattle and cowrie shells to today's electronic currency. Here, get an overview of the history of money. Editor's Note: The dates below mark the approximate start of use.

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This link shows the relation between money and the debt gives all history about how this established.

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The U.S. banking system is one of the largest, most complex, controversial and misunderstood business structures in the world. In this article, we will look at four specific features of the U.S. banking system that have caused much of the skepticism and confusion surrounding U.S. banks. With this information, we can then determine if economic production should be used as a proxy to link the complex interrelationships that exist between the policies of the Federal Reserve, the money supply system, the national debt level and corporate income taxes.

The Federal Reserve System and Money Supply
The Federal Reserve was created by Congress in 1913 in order to administer monetary policy. Since its creation, many people have questioned the constitutionality of the Fed. In addition, the Fed's use of a fiat currency system, the elusive manner in which the Fed creates money out of "thin air," the Fed's use of a fractional reserve banking system and the Fed's reliance on the economic concept known as the velocity of money, have helped promulgate much of the controversy surrounding the manner in which the Fed operates. Here is an overview of four of the issues that need to be better understood about the Fed.

Fiat Currency
The Federal Reserve utilizes a medium of exchange known as a fiat currency system. President Nixon established this system in 1971 when he took the U.S. monetary system off the gold standard. To this day, many people are upset with this policy and stridently believe that the U.S. currency should be tied to some form of commodity. This, in turn, has caused an ongoing controversy that the Fed has had to deal with for more than 40 years.

Money Creation
The Federal Reserve effectively creates money by implementing policy through its Open Market Committee's operations. To create money, the Fed simply buys government securities such as Treasury Bills, Treasury Notes and Treasury Bonds from participating banking institutions. The Fed does not buy Treasury securities directly from the Treasury Department. Instead, the Fed buys Treasury securities in the "open market," in order to operate in compliance with the Federal Reserve Act of 1913.

The money that the Fed uses to buy Treasury securities has not existed before, but it does have value, because the Treasury securities that the Fed receives and holds in trust, as collateral for the new money it has created and put into circulation, has value. Ironically, when the Fed buys Treasury securities, it does not have to print money to buy them. Instead, the Fed issues a credit to the banking institutions and records the transactions by placing the value of the Treasury securities on its balance sheet. The banking institutions treat the credit just like money, even though no actual cash has been printed.

This process is guaranteed by the full faith and credit of the U.S. government. This, in turn, means that the entire U.S. banking system is dependent upon the ability and willingness of U.S. taxpayers to honor the financial obligations that are implemented by the Fed.

Fractional Reserve Banking System
The Federal Reserve also increases the money supply level via the use of a fractional reserve banking system. This system facilitates the expansion of the money supply through a process known as the multiplier effect. The multiplier effect is implemented through the establishment of a reserve requirement that has been set forth by the Fed for each of its banking member institutions. Since, 2006, the reserve requirement has been set at a rate of 10% for transactional deposits.

Given this level of collateral requirement, the Federal Reserve has put in place a mechanism where the money supply level could be theoretically increased by a factor of up to 10 times the amount of assets held on the Fed's banking member institutions' balance sheets. Of course, this depends on how the banking institutions decide to lend the money and what the borrowers do with the money that they receive. History has shown that a significant amount of money will be held out of circulation by consumers. Therefore, the actual increase in the money supply level will likely never approach the maximum level that could be created by the use of the fractional reserve banking process.

With that said, the multiplier effect is a crucial part of the U.S. banking system, because it allows the monetary system to operate with a money supply level that is far smaller than the amount of money needed to foster the economic production that takes place in the U.S. economy.

Velocity of Money
The Federal Reserve also relies on an economic concept known as the velocity of money in order to help ensure that the U.S. banking system has enough money in circulation to foster all of the transactions associated with U.S. economic production. The velocity of money represents the frequency in which a single unit of currency turns over within the economy in a given year.

For example, if a dollar is used to allow a farmer to buy corn seed, who then grows and sells the harvested corn to a company that makes cereal, which in turn sells the cereal product to a grocery store to be sold to a consumer, a single dollar could theoretically be used to facilitate four dollars of economic activity in a given year. This means that the number of dollars that are required to be in circulation would only need to be one-fourth of the economic production that takes place in the economy.

In actuality, empirical evidence shows that the velocity of money, as defined by the M2 money supply, is less than a factor of two. This means that a dollar is typically turned over less than two times per year in the U.S. economy. Nevertheless, the Fed relies upon the velocity of money in order to meet a portion of the demand for money that is needed to be in circulation in order to foster all of the economic production that takes place in the U.S. economy.

With these issues in mind, let us now look at a host of changes that could be made to the current U.S. banking system in order to simplify its structure and resolve the issues surrounding its existing operations. Ironically, this new approach will rely heavily upon keeping the national debt level in concert with U.S. economic production.

An Approach to Linking the Fed, Money, Debt and Taxes with Economic Production
As most people are aware, in September of 2012, the national debt level in the United States surpassed $16 trillion dollars. This amount seems very high when it is analyzed on a per-household income basis; therefore, it appears that the U.S. is quickly approaching financial calamity. However, when one takes into account that current U.S. economic production is also approximately $16 trillion dollars, one can see that there are important factors to consider when assessing the appropriate level for the country's national debt.

Let us assume that both the U.S. Congress and the Federal Reserve wanted to establish a robust U.S. banking system that was free of any of the current issues and skepticism surrounding its current operations. The Fed could theoretically accomplish this goal by taking a multi-step approach. First, the Fed could endorse a policy that would directly tie the money supply level with the level of economic production. This policy would also require the national debt level to be tied to the level of economic production, because the Fed would need to increase the money supply in circulation to a tune of $16 trillion dollars. This, in turn, would require the Fed to purchase $16 trillion dollars of U.S Treasury securities. By tying the money supply level and the national debt level directly to the level of economic production, the use of a fiat currency system would have a clear and logical basis, and therefore the use of a fiat currency in the U.S. banking system would be completely legitimized.

Once the Fed tied the money supply level and national debt level with economic production, the Fed could then eliminate the reliance on the use of a fractional reserve banking system and disregard the theoretical concept of the velocity of money, in order to remove the operational policies that are responsible for raising so much of the skepticism surrounding the current operations of the U.S. banking system. With that said, this type of policy change would also mean that the Fed would need to raise the total assets on its balance sheet from approximately $3 trillion dollars to $16 trillion dollars. This, in turn, would validate the actions of the Fed and the size of its balance sheet, and the U.S. banking system would have a clearer and more robust structure.

Implications of Linking the Fed, Money, Debt and Taxes with Economic Production
The implications of linking the money supply level with economic production would have a profound impact on the U.S. banking system and the perception of the national debt level. First, the Fed would have much more power due to the fact that the amount of assets under its purview would increase substantially. While this may be a cause for concern with those people who question the legality of the Fed's existence, this provision would in fact remove the arbitrary and capricious nature in which the Fed is perceived to rely upon in order to carry out current U.S. banking operations and, instead, replace it with a clear and logical approach that everyone understands.

Second, a banking system that matched the money supply level, economic production and the national debt level would require a provision that would only allow Treasury securities to be purchased by the Fed. Third, Treasury securities would need to be issued as zero coupon bonds, where the discount rate on the bonds matched the expected long-term growth rate of economic production. Fourth, the ongoing issues surrounding the appropriate national debt level would become a moot conversation, as the national debt level would be deemed appropriate, if it matched the level of annual economic production. Fifth, a national debt level that exceeded total economic production would be the new policy issue that would require justification by policymakers. Sixth, the national debt level would need to increase each year in a manner that would accommodate the growth in U.S. economic production from the prior year.

The Importance of Corporate Income Tax Policy
The corporate income tax system has a key role to play in a U.S. banking system where the Fed's balance sheet, the money supply level, the national debt level and annual economic production were maintained at similar levels. In order to help explain the importance of corporate income tax policy under this type of new banking structure, keep in mind that in a modern economy technological advances and process efficiencies develop as a result of innovation and invention. Since we know that these types of technological improvements increase production far beyond the level that is capable of being generated by human labor alone, a concentration of economic productivity will naturally accumulate to a smaller number of market participants that are utilizing these new types of technological efficiencies.

This means that personal income tax revenue will become less important in the future, as a greater percentage of economic production will be attributed to technological efficiencies at the corporate level. As a result, there would clearly be a need for corporate income tax policy that is correlated with economic production, in order to ensure that enough tax revenue is being generated to meet the money supply level of a growing economy. With this in mind, a balanced budget amendment would then need to be implemented by U.S. policy makers in order to keep the Fed's balance sheet, the national debt level, the money supply level and total economic production at relatively comparable levels. This, in turn, would help solidify a well-designed U.S. banking system and the actions of the Federal Reserve.

The Bottom Line
In a mature economy, where a country's national debt level is approximately the same size as its economic production, a valid argument can be made that the amount of assets on the Fed's balance sheet, the money supply level, the national debt level and economic production should be maintained in equilibrium, in order to maintain a logical and robust banking system. Accordingly, this type of banking system would require major changes in how the Federal Reserve currently operates and would place a much higher importance on corporate income tax policy.

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The Link Between The Fed, Money, Debt And Taxes

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The U.S. banking system is one of the largest, most complex, controversial and misunderstood business structures in the world. In this article, we will look at four specific features of the U.S. banking system that have caused much of the skepticism and confusion surrounding U.S. banks.

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It has explained Peer-to-peer lending offers an opportunity to change perspectives and reacquaint investors with the real economy.

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Do you know what happens to your money when you put it in the bank? If you are like the majority of the population, including, it would seem, the majority of politicians, then you believe that your money is kept safe in the bank. In fact, quite a number of the people who still use branches are older people coming in to visit their money and check it is all still there.

However, the word bank (with all its connotations of solidity and stability) is in fact rooted in the latin meaning "bench" and refers to the seating in any Roman forum where money lenders used to hang out. Money lenders who could be bankrupted (literally their bench was broken so they couldn't sit there) if their loans went bad. Bankers ancient and modern relied on the confidence of the public to trust in their ability to pick good credit risks from the bad and deposit money with them in return for interest. The ensuing credit crunches which are the result in the collapse of that trust and confidence are as ancient as credit itself.

So where did your money go? Well, in theory, the bank has turned your money from a liability on one side of its balance sheet (an IOU to you as the depositor) into a credit on the other side, such as a loan or bond to a business. This loan or bond, despite it representing money owed to the bank, is counted as an asset and is given a real value on the balance sheet based on an assessment of the risk that it won't be paid back; the higher the risk, the lower the 'book' value of the asset. The loan also provides new money to the bank in the form of interest, a small portion of which is paid to the depositors as reward for their trust in the bank. The rest is profit after the wages of the bankers are taken into account.

This is important because what the bank does with your money really does affect the world around you. It is money that produces the activities and companies (such as those engaged in fracking) whose actions we might fundamentally disagree with. However, you don't need to feel powerless in the face of the big banks and their current dominance over how money works for us in the economy.

In the 21st century we have seen new communities emerging which have done away with the need for increasingly complex banks to mediate between borrowers and lenders, businesses and investors. Peer-to-peer lending and crowdfunding use the internet and social media to bring together people in networks to facilitate lending, donating and investing money.

While the deposits with these new platforms are not covered by government compensation schemes, their aim is not to encourage people to hoard cash, but to invest directly in an individual's or business' ability to repay a loan or make a return on your investment.

When setting up Abundance Generation, around the time of the financial crisis, we started with the goal of creating this more democratic form of finance. Investments in renewable energy infrastructure were a great place to start because they represent a stepping stone towards a revolution in the way ordinary people can invest their money.

We called it democratic finance, because of the control an individual has over how their money is used and what activities it generates in the real world (and the impact of those activities for future generations). With crowdfunding, for the first time people can be sure that their money is being used to not only generate a profit (returns on renewable energy infrastructure investment range between 6-10%) but also do so in such a way which fits the moral choices we face as individuals and as a society.

Renewable energy projects are by their very nature ripe for democratisation. They are decentralised, discrete, local and smaller in scale than, say, the investment required for a new nuclear power station (and its 150 year clean-up bill). They provide an opportunity for people to put their money to work directly in the real economy, generating clean renewable energy and getting a return that is in turn directly linked to the cash earned from selling the energy to the grid. As with any investment there are risks. In the case of Abundance, the investment is in the form of debentures, official IOU's issued by the projects. Debentures are long term investments (lasting up to 20-25 years) and returns are variable which means that you may not get back all of your original investment. The project risks are well known for the established technologies such as onshore wind and solar with estimates based on many years of experience.

Renewable energy investment offers a unique opportunity to change perspectives on money in society, shifting away from the idea that the best place for your money is in an account and reacquaint ordinary investors with the idea of assets and putting their money to work in the real economy.
Bruce Davis is co-founder of This content is brought to you by Guardian Professional. Become GSB member to get more stories like this direct to your inbox Abundance Generation Topics

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A brief history of banking: the link between money and society

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Do you know what happens to your money when you put it in the bank? If you are like the majority of the population, including, it would seem, the majority of politicians, then you believe that your money is kept safe in the bank.