2 thoughts on “Lecture one for Money & Banking 101. The roots of money, banking and finance.”
Professor, I found it interesting how you explained that money grew out of barter to solve the problem of double coincidence of wants. It showed me that money is less about paper and more about trust and acceptability in society.
Based on that lecture, here’s something I’m curious about:
Given that money depends so much on acceptability and trust, what happens in societies (or situations) where trust in institutions collapses (for example, in hyperinflation, war, political instability)? More specifically, how do new forms of money or financial substitutes emerge under those conditions, and what role do informal institutions or community trust play in that process?
So far we have trusted government and the Central Bank to maintain financial stability. Even when the Reichsmark was suffering hyperinflation, the Germans trusted those who caused the problem to establish a new currency, the Deutschmark, and for it to become money. However if all faith is lost in government and Central Banks to maintain stability then it may be the time of Bitcoin and other cryptocurrencies to stand in.
jbhearn 
Professor, I found it interesting how you explained that money grew out of barter to solve the problem of double coincidence of wants. It showed me that money is less about paper and more about trust and acceptability in society.
Based on that lecture, here’s something I’m curious about:
Given that money depends so much on acceptability and trust, what happens in societies (or situations) where trust in institutions collapses (for example, in hyperinflation, war, political instability)? More specifically, how do new forms of money or financial substitutes emerge under those conditions, and what role do informal institutions or community trust play in that process?
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So far we have trusted government and the Central Bank to maintain financial stability. Even when the Reichsmark was suffering hyperinflation, the Germans trusted those who caused the problem to establish a new currency, the Deutschmark, and for it to become money. However if all faith is lost in government and Central Banks to maintain stability then it may be the time of Bitcoin and other cryptocurrencies to stand in.
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