Coinage as a technological development came to the rescue in Lydia (an area of the Mediterranean region that today is part of Turkey) around 600 BCE, and was soon adopted throughout the Persian Empire and by the Greeks. For the first time in history, dies were manufactured to impress images onto various disc-shaped objects made of gold and silver. The first Lydian coin, made of a specific weight of electrum, contained the government-mandated image of a lion. This image became recognized and synonymous with authenticity by the people of that city.
The first bimetallic coinage system (silver and gold) most likely originated with King Croesus, with the following exchange rate between the two:
- 1 gold starter = 8.17 grams of gold
- 1 silver starter = 10.89 grams of silver
- 1 gold starter = 10 silver starter
The use of bimetal coins rapidly spread throughout Greece (silver coins with an image of a turtle as a representation of the city’s prosperity based on maritime trade). Gold and Silver discs, having been assigned standardized weight and sizes, officially became coin money. Trade was now a simple matter of counting rather than weighing the purity and composition of precious metal pieces and nuggets. Money as concepts soon became synonymous with pure silver and pure gold. It is clear that within a few short centuries, silver and gold had become so important that they made and sustained empires and even financed expansionary wars.
While nations and empires may fall, owners of precious metals will withstand anything a badly conceived economic system can throw at them. If pure silver and gold sustained empires, imagine what they can do for individuals.
Article courtesy of Going for Gold: A guide for the South African precious metal investor by Zoltan Erdey
