The national debt continues to soar in the United States and talk of a trade war with China is currently taking center stage. This situation has many people fearful of an economic collapse and its impact on our financial system.
Merriam-Webster defines money as "something generally accepted as a medium of exchange, a measure of value, or a means of payment"
The US Dollar is currently the largest world reserve currency and used to trade commodities such as oil and gold on international markets. The dollar definitely fits the definition as a medium of exchange and a means of payment. What about a measure of value? Here is where things get tricky.
Our monetary system is no longer backed by gold or silver and is free to fluctuate. At one point, the words on this US dollar bill had significant meaning. THIS CERTIFIES THAT THERE HAS BEEN DEPOSITED IN THE TREASURY ONE SILVER DOLLAR PAYABLE TO THE BEARER ON DEMAND. This effectively created a standard unit of measure in which everyone could work from.
Imagine for a moment your bathroom scale started reading 5 pounds lower one day and 3 pounds higher the next. In the case of a bathroom scale, the former would be greatly appreciated. However, the same cannot be said for trading goods by weight. You would not want to receive 2 lbs of tea one day and 1.5 lbs the next so standards for weights have been in existence for millennia and used for equal and fair trade.
So what has changed?
Thousands of years before currency, bartering was the only means of commerce. Trade partnerships were established and goods moved through trade routes and city centers became the marketplace. Bartering of a particular commodity does not make that commodity a currency or money. However, throughout history, various commodities have been extremely valuable and treated as money.
Roman Soldiers were once paid in salt due to its high value and because of its nutritional necessity. However, due to its cumbersome nature, salt was not easily transported on and off the battlefield and lost lost much of its flavor as a currency. It should be noted that the word salary was actually derived from the Latin word “salarium” which was the Roman word for “money used to buy salt." Another form of edible currency was Parmigiano cheese. At one point this beloved cheese was actually accepted as bank collateral in Italy. In Central America, the cocoa bean was the food-currency of choice and tea was commonly used in China prior to the Ming Dynasty as a form of currency in place of coins or paper money. The use of tea bricks as the preferred monetary commodity arose because tea could be brewed or even eaten as a source of nourishment.
Tea bricks or compressed teas are whole leaves or finely ground tea compressed into brick form. Tea bricks were highly valued in many parts of Asia, and its use as a currency spread throughout China, Mongolia, Siberia, Tibet, Turkmenistan and Russia. Brick tea was used as medicine to rid cough and colds, and some historians say tea leaves supplied variety to the diets of people living in areas where vegetables and herbs were scarce. In Tibet, tea bricks were in such demand that swords, horses and other property were sometimes priced in a given number of tea bricks. By the 16th century, the tea trade was well established throughout Europe, and in time English colonists brought the custom to America along with the first settlers. Today, tea is consumed by more people than any beverage except water.
The bartering system has is downfalls. If two parties do not want each other goods it can not serve as medium of exchange or means of payment even though the items have value. The bartering system still remains in some sections of commerce but cash is still king.
One thing that remains astonishing in today's society is the concept of value. We use money to buy goods and services every day paying little attention to its true value. If hyperinflation gains its foothold in our economy as some economists predict, some commodities will hold there worth and some will become worthless. If history holds true, however, tea will be a commodity that grows in value due to its popularity, multi-faceted uses, and health benefits. While it is unlikely compressed tea bricks will take the form of currency again, you may want to stock up on loose leaf tea which has great consumption value.
Take for instance Dragon Well Lung Ching. This higher end green tea costs a mere 17 cents per gram. Quite a bargain considering that equates to pennies per cup of tea. Even better values can be found in Imperial Tea Garden® economical bulk size packaging. A one pound bag of Bukhial Estate allows you to enjoy the fresh robust flavor of a fine black tea every morning for just 10 cent per cup. Compare that to your $5 latte. NOW THAT IS VALUE!
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