HISTORY OF THE FOREX MARKET- ARTICLE ONE

The forex market ( forex is short for foreign exchange) had a very unique history. When there was no highly organized financial institution, no big business or no internationally accepted currency. the only kind of market was a simple system know as trade by barter. this system of exchange involves actual goods without any money like object.
This simple yet, primitive means of exchange was effective in a local area but, had many disadvantages. Therefor, a better means of exchange was needed, one without any disadvantage.

People in ancient times used many valuable things to exchange for goods they needed this is called commodity money. The Encarta encyclopedia states " The value of commodity money is about equal to the value of the material contained in it. The principal material used for this type of money have been gold, silver and copper. In ancient times, various articles made of this metals, as well as iron and bronze, were used as money, while among primitive societies commodities such as shells, beads, elephant tusks, furs, skins and livestock served as mediums of exchange".

Gold and silver and bronze where used to make coins as early as the 6th century BC in places like Greece, Asia, and Europe and obviously they where used as a means of exchange.
 

THE INVENTION OF PAPER CURRENCY

Some time in history countries decided to convert the value of their precious Gold, Silver and Bronz to paper currency that had the same value as Gold, Silver and Bronz.


To be continued.