MONEY PROBLEMS AREN'T NEW

(These thoughts are changed three times weekly and cover a wide range of subjects and insights)

You're worried about the economy? Be patient. We will recover. We have before! It's all in the history of finance so keep reading.

During the Revolutionary War my ancestors bartered everything from bullets to bread to animal skins to tobacco. It was called "country money." Since paper money wasn't worth a Continental they probably traded on the cow/pig market as well. I'll give you three of my pigs for your cow. It worked except that finally more and more people decided money was better for the simple reason that it is difficult to carry a cow around in your back pocket. And yes sometimes no one was interested in the other farmers pigs or cow. Supply and demand.

However, whether the currency of exchange is bovine or Wall Street backed investments recessions have taken place and will continue to take place. The very nature of finance demands a certain number of bumps in the road.

It is doubtful there was a mortage loan crisis in 3100 BC in Mesopotamia but since this was the beginning of writing and the keeping of accounts most likely some accounting was less than accurate and some frinancial decisions less than wise. The first banks in Babylon looked like temples and palaces because that is exactly what they were. The name of the first real recorded Banker was Pythius who operated in Greece and Asia Minorl. Their money didn't read "In God we Trust" and as time went by, as always, the ways of some men could not always be trusted either. People learned from their mistakes and for several decades didn't make them again.

When another five hundred years had passed the Code of Hammurabi began to take charge. It was obvious that without some kind of laws governing banking operations a natural inclination toward greed and bad decisions would take over (was taking over) and whoever had desposited would soon find nothing left of their deposits. By 2550 BC Cappadocian rulers were starting to guarantee the weight and purity of silver ingots but still the equivalent of a dollar might vary. People were trying to make the whole money business work. They really were!

A large portion of the popualtion wasn't affected one way or the other because they had nothing to bank or barter with. They were slaves and when compensation was doubled they never noticed because multiply nothing by two, three or even four and you come up with the same figure.

Money is whatever you say it is. By the year twelve hundred the larger the Cowrie shell collection the richer the collector. Indeed, the Chinese character for money originally represented a Copwrie shell. That's right. Worth is both a subjective and objective thing.

By 687 BC the fist crude coins were minted in Lydia, Asia Minor. This allowed the first retail shops to open. Commmerce as we know it was on its way.

The history of war and money cannot be separated. Even the word "to pay" comes from the Latin word meaning "to pacify." Wars cost money and national war debts are ageless. An eighteenth century writer once wrote, "Nowadays that prince who can best find money to pay his army is surest of success." Out of such a truth arose the practice that if there isn't enough money to fight a war, practice deficit spending and let future generations pick up the check.

In our own brief national history the Colonies in America were traditionally short of real coins. Indeed, our enthusiastic acceptance of paper money and its suppression by the British was a factor in provoking the American Revolution. By 1740 England was giving a great big "No" to the colonies and their printing of paper money. In 1775 as the Revolutionary war began and hyperinflation took over. Among the reasons, in North Carolina there were seventeen different forms of money declared as legal tender. Who said that bad financial decisions were limited to any one century?

When the war finally came to an end a new era began, a war between debtors and creditors. In 1812, over twenty years after our beginnings we still didn't have a National Bank to exert a restraining hand on commercial banks. it was eighty years before we finally started to get our act together. Progress moves slowly, slower and slowest but eventually it really does move.

Now it is the 21st century and certain questions arise as they have always arisen. Are we in a recession or a depression? What investments are good or invitations to disaster? What is the next economic problem laying just around the corner? For years by barter and banter, by banks and Savings and Loans or by money hidden under the mattress American have sought the better ways to manage money rather than be managed by it.

And the dollar? What is it worth? What one could buy in 1913 for $1.00 would today cost $21.78.