A Yuan, Euro and Dollar Walk Into a Bank…
September 16, 2011
Currency markets have been the pawns in central bankers’ chess games around the world in recent weeks, as each country looks to gain the slightest edge in today’s growth-starved economy.
Weeks ago we saw a big intervention from the Bank of Japan, which stepped in and tried to stop the yen’s downward slide. Last week, it was the Swiss National Bank that moved to improve the Swiss franc’s stature among global currencies. Also recently announced was that the Hong Kong dollar soon will no longer be pegged to the U.S. dollar, which got foreign exchange traders excited.
Even gold has gotten in on the currency game. Despite disagreement from America’s own money man Ben Bernanke, many argue gold is currency since: A) the Constitution says so and B) it’s a store of value. But, paper currencies such as the euro, yen, yuan and the U.S. dollar are the main media of global finance today.
Paper money has been around a long time. It was first used by the Chinese during the Tang Dynasty in 806 AD–500 years before Europe began printing money in the 17th century. It would be another 100 years before America started circulating a national paper currency. And few Americans were more involved in the national paper money history than Benjamin Franklin, who wrote about, designed and printed paper money prior to the national currency. His face on the $100 bill today is our reminder of his contributions as a printer, scientist, scholar, writer and politician.
Given the important role paper currency plays, we’ve developed a quiz along the lines of our gold, oil and emerging markets quizzes so you can test how much you know. Give it a try. If you do well, don’t forget to show off your score to your friends.