Wednesday, December 15, 2010

the beautiful alchemy

My new heroin is the BBC series, "A History of the World in 100 Objects" (Notice, by the way, how many of the objects are coins or other forms of money.)

The segment about the Ming banknote from the fifteenth century is awesome, and right now I'm working on a few paragraphs about it, and about Marco Polo's reaction to paper money, for the beginning of my book.

If you don't listen to the whole podcast, enjoy this quick excerpt quoting the Governor of the Bank of England. He's commenting about the statement on the note that the currency will be valid forever.

A banknote is “an implicit contract between people and the decisions they believe we (government) will be making in the years and decades to come about preserving the value of that money. It’s just a piece of paper. There’s nothing intrinsic in value to it. But it’s value is determined by the stability of the institutions that lie behind the issuance of that paper money. If people have confidence that those institutions will continue, if they have confidence [the institutions'] commitment to stability can be believed, then they will accept and use paper money and it will become a regular and normal part of circulation. And when that breaks down, as it has done in countries where the regime has been destroyed though war or revolution, then the currency collapses."