Where does money come from?

Question

Money: You work to earn it. You buy things with it.
Where does it come from, and why does is have value?

Sigh! Not much of an understanding of the monetary system among the general public.

Dispite what Wikipedia says, in theory U.S. currency is not fiat script.

Answer 1

It has value because we assign value to it. The need for money was born out of a need to replace the original barter system. While it is difficult to carry around commodities for the purpose of trade, money is compact. Our money was originally based on the gold standard which held that for all money minted we had to possess an equal amount of gold to back up that currency. Today we are no longer on the gold standard and in reality our money is not worth the paper it is printed on.

Edit: I will grant you that one. Personally I do not know what constitutes the determining factor for the amount of currency allowed in the market at any given time these days, but then economics always bored me to death anyway so I have always made due with basic understandings in these areas.

Answer 2

It come from the ideal of a monetary value. Why does it exist because if it didn;t exist there would exist a barter system where you have to trade one thing to obtain another. Let say you have five fish and you want to for some lobster. depending on the amount of fish that the owner will take exist a value that the owner is willing to trade the lobster for. Without a monetary system this world would be unorganized and unable to work efficiently. It has value because it help everybody know the value of thing. Let say you want to buy a can of pepsi you know that it is around $1. without money you wouldn't know what the cost is. You have to figured it out, that why money exist. Money exist for the sole purpose of putting value on thing and making it universal for all to know

Answer 3

It's fiat. Cash is printed at the mint. Money (on paper) is also created at the banks thanks to the reserve system in place. It has value because we accept it in exchange for our goods/services with the idea someone else will accept it in exchange later.

Edit: In theory, what backs US currency other than the US government's promise to make good all debts? We dropped the gold and silver standards years ago. That's fiat.

Answer 4

Money has value since individuals understand that our money in the U.S. will be accepted in return for goods and services. So the value is really because people are confident that they can use money they receive from their jobs or investments to then purchase goods and services and to pay bills they owe for such things as electricity and water. Our currency though is just paper and coins are just metal. It is the ability to use them in exchange for things we want or need that gives them value.

Answer 5

Take a course in Macroeconomics - Money and Banking. In the US, the banking industry really creates/controls the amount of currency in our economy.

Today. most money is electronic blips in computers.

Answer 6

it comes from what is called a mint(a money factory) and it has value because people work for it,the goverment put it in the chain of work,u have a job and work for a company, the company make money for selling a product,you get money for doing your bit and when you buy somthing that goes into a differnt company.and it all goes through a cycle

Answer 7

People... the US currency is not backed by gold. It is backed by the full faith and credit of the US Government.

And money has value because people accept that it has value.

Answer 8

Hey man... this question is boring... money is just a unit to compare the values of different goods or services. You could use everything that isn´t easy to make yourself...
and the value results from the fact that we accept it... nothing else... there are great theories of money value, but let´s be honest: if we don´t pay with $ anymore and all decide to use eg €, then there is no worth behind $ anymore

Answer 9

I don't really know where it comes from but it's made out of material that makes it last much longer than regular paper.

Answer 10

The amount of money to place in circulation is one of the primary functions of the federal reserve. Think liberal, think Big.