Keeping sterling strong
Many things can do service as money. Schoolboys sometimes use cigarette cards; primitive tribes use beads. But one thing that will upset the bargaining usefulness is an increase in the quantity of the monetary units without an increase in the number of things that the units will buy. A new boy at school bringing with him a thousand cigarette cards will greatly reduce the value of those already in circulation; the arrival of a boatload of beads will send the ‘exchange rate’ of beads in New Guinea down with a bump. The discovery of rich mines in the New World by the Spaniards upset the value even of such stable monetary units as gold and silver.
KeywordsExchange Rate Foreign Currency Monetary Unit Home Consumption Rich Minis
Unable to display preview. Download preview PDF.