Forex; the History of Exchange

Our world has not always revolved around money as a medium of exchange. In fact way back ever since the beginning of time, people have cared more about the resources that they could gather themselves. But there has always been one medium of gaining things that you need and want; exchange.

As early as the caveman times, a value of a good could be determined when you try to exchange it for other goods. The higher the amount of goods are that are offered for exchange, the higher the value and probably also the quality of the good provided will be. People soon realized that exchange between single individuals was too limited and the need for establishing a more general means of trade rose. It was also important to regulate and establish general mediums of exchange. Since people did not have gold or any other metal to trade, the mediums remained rather simple.

If we were to use these mediums of exchange today in the era of Forex, we would all be millionaires if not billionaires. The used mediums of exchange were items such as stones or feathers, and even teeth. Later on, metals, in particular silver and gold were used as mediums of exchange and also had a significant storage value.

In the middle ages, governments established the coin as a stable medium of exchange. This is still maintained until today, and paper money has also been added to the unified medium of exchange. But how did the Forex get to where it is now?

With the advent of the coin, different currencies were able to establish themselves. The measurement of value of each currency is through gold. You could always exchange your coins or paper money for gold in a certain exchange rate depending on economy and time. After the First World War, Forex controls were introduced. After the World War II, world leaders needed to establish a new world currency system. This system was established in the favor of the dollar, which means that we have to measure every currency in Forex against the dollar.

In the last decade, the Forex was not fixed anymore and the free flow of the Forex was to let every country adjust their own value of their currency. This did not happen Europe for the Euro was introduced. But unfortunately no matter how free the Forex may seem, it is still heavily dependent on the first world countries like USA and Europe. Other currencies are comparing themselves to the Dollar or the Euro as a medium of exchange.