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Fiat money is money whose denomination is higher than its market value; paper money backed by nothing other than a belief in its universal acceptance, such as banknotes and check deposits.

What is the basis of fiat money?

Currently, the United States uses a fiat money system. This does not mean, however, that other types of monetary systems should not be studied.

Many financial institutions in the US have the right to issue fiat money in the form of opening checking accounts; we call such financial institutions depository institutions. Savers can write checks to pay for purchases of goods and services.

The history of money is a movement from barter to commodity money such as gold and silver coins, and then from commodity money to a commodity standard, and then to fiat money.

As noted in Chapter 2, under the gold standard, the monetary base is the size of the gold reserve. In a fiat money system, however, gold loses its direct connection with money. However, there is a monetary base, which is basically the amount of money issued by the government. In the United States, the monetary base consists of cash in circulation plus reserves of depository institutions.

Nowadays in the US everyone accepts coins, Fed notes and checks as payment for goods and services sold. The question arises: why do we willingly accept in payment something that has no intrinsic value. This means that the value of payment rests on people's belief that they can exchange fiat money for goods and services. The word fiduciary comes from the Latin fiducia, which means trust, faith. In other words, under a fiat money standard, money, whether in the form of cash or checkable deposits, is not convertible into a strictly defined amount of gold, silver, or other valuable commodity. People cannot exchange paper money in their purses or wallets or checks for a specific quantity of any particular item; paper money itself is just pieces of paper. Coins have a value printed on them, which is usually higher than the value of the metal they contain. However, cash and checkable deposits are money because they are accepted for payment and because their value is predictable.

Governments and central banks also issue fiat paper money. There are $350 million worth of such notes still in circulation. The remaining fiat money in use today exists in the form of Federal Reserve notes. Chances are, all the paper cash in your wallet or purse is Fed notes.

There are two main types of money: commodity money and fiat money. In a commodity money system, real goods are used as money. In this system, based on a commodity standard, both full-fledged money and representatives of full-fledged money are used as money. In contrast, the fiat money system is based on a fiduciary standard in which the value of money is tied to people's belief that it will be accepted as payment for goods and services. Fiat money can be issued by governments central banks and/or depository institutions.

Since during this evolution waiting costs do not change, and transaction costs are reduced, the minimum circulation costs are also reduced. The time interval corresponding to the minimum distribution costs is also reduced. In general, the evolution in the fiat money system leads to both a cheaper exchange process and a reduction in the time spent on it. Both each individual and society as a whole benefit. This reduction in costs explains the historical transition to the fiat money system that currently exists.

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PAPER MONEY, paper tokens of value issued by the state, having an official forced denomination and unified form. This gives them social significance, universal acceptability and circulation in the country. Paper money has no intrinsic value, since the labor costs for its production are insignificant. The difference between the nominal value of paper money and the cost of printing it forms the share premium. Paper money performs the main function of money and is not classified as securities.

The state can arbitrarily increase the denomination of paper money and issue any amount of it. But paper money issued into circulation is subject to the requirements of objective law money circulation, according to which the volume of circulating money supply is directly proportional to the sum of commodity prices and due payments and inversely proportional to the speed of circulation of the same name monetary unit. The spontaneous reaction of economic turnover to a violation of this law is inflation, a decrease in the purchasing power of paper money. This happens, in particular, when they are excessively issued by the state in excess of the real needs of the circulation of money in order to cover the budget deficit, military and other unproductive government expenditures.

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Paper money has undergone significant modifications in the process of its long evolution. Historically, they arose as a sign of coins in circulation. The emergence of paper money was due to the objective needs of economic circulation for elastic money circulation, reduction of circulation costs, difficulties and risks associated with the use of coins, including heavy coins, for payments. The predecessors of paper money, like banknotes, were the safe receipts of merchants and bankers about accepting coins from clients for storage when heavy iron and bronze coins were in circulation (7th century).

IRREGENDABLE PAPER MONEY

For example, 1000 bronze coins weighed 3.5 kg.

The prerequisite for the appearance of paper money was the deviation of the denomination indicated on the coins from their actual weight content. This happened under the influence of three factors: natural wear and tear of coins; their damage by the state and private counterfeiters (starting with the slave system); issuing money to cover government expenses. The state used the objective necessity and possibility of issuing paper money to finance its expenses, especially during economic and political shocks, as well as to ensure the elasticity of money circulation. As a result, paper money replaced real money.

Paper money first appeared in China in 1260-63. The second issue of banknotes was mentioned by the traveler Marco Polo in 1286. With special permission, they were exchanged for metal. Under capitalism, paper money began to be issued regularly: in Sweden (since 1644), North America and Massachusetts (since 1690), France (since 1701), Russia (since 1769), where the issue and exchange of banknotes for silver and copper were carried out by two bank assignations- in Moscow and St. Petersburg. During the French Revolution of 1789-94, assignats were issued and circulated until 1797, then again during the Franco-Prussian War of 1870-71. In Great Britain, paper money was issued from 1797 to 1820.

To finance the Revolutionary War in North America, continental money was issued in such quantities that a cartload of food was given for a cartload of paper money.

A type of paper money was treasury notes, usually issued by the Treasury, sometimes central bank to cover government expenditures and budget deficits. In Russia, treasury notes issued by the Provisional Government were commonly called “Kerenki”. In Soviet Russia in 1919, treasury notes were called “account signs” and then “sovznaki”. During the period of monetary reform of 1922-24, new treasury notes were issued, the issue of which was transferred to the State Bank of the USSR in 1925; discontinued in 1990, and in 1993 they were exchanged for Bank of Russia banknotes, since there was no fundamental difference between them. Thus, in the historical aspect, the concept of paper money covers a wide range of its functional forms, which have specific features. IN modern conditions There is virtually no paper money issued by the government treasury. In most countries, paper money circulates in the broad sense of the word, including modern functional forms of credit money - banknotes, bills, checks.

Unchangeable for gold and not backed by bills of exchange, banknotes essentially degenerated into paper money, which became the basis of modern monetary system. In most countries, their issue is carried out by the central bank in the process of lending to the economy, as well as for the increase in official gold and foreign exchange reserves. Since paper money is subject to inflationary depreciation, the volume of its issue has become the object of government regulation. Monetary policy is formally aimed at ensuring stability of purchasing power and exchange rate paper money in order to solve the problems of the country's socio-economic development.

Lit.: Money circulation and credit under capitalism / Edited by L. N. Krasavina. 3rd ed. M., 1989; Shenaev V.N. Monetary and credit systems of Russia. M., 1998; Money. Credit. Banks / Edited by O. I. Lavrushin. 2nd ed. M., 2004.

L. N. Krasavina.

In the 70s XX century happened complete replacement real money with signs of value - paper and credit money.

Paper money are signs or representatives of full-fledged money.

The essence of paper money- This banknotes, issued to cover the budget deficit and usually not exchangeable for metal, but endowed with a forced exchange rate by the state.

Credit money arise with the development of commodity production, when purchase and sale is carried out in installments (on credit). Their appearance is associated with the function of money as a means of payment, where money acts as an obligation that must be repaid in advance. fixed time real money.

Credit money has gone through the following development path: bill of exchange, accepted bill of exchange, banknote, check, electronic money, credit cards.

3. THEORIES OF MONEY

One of the earliest theories of money is metal theory of money. Representatives of early metalism were the English mercantilists: William Stafford (XVI century), Thomas Maine (WII century), Italian mercantilist Ferdinando Galliani century) and the French mercantilist Antoine de Montchretien (XVI century).

The metal theory was based on the basic tenet of mercantilism, that gold and silver are the only types of wealth. The separation of the value represented by money in circulation from the value of the metal contained in it served as the impetus for the development of the nominalistic theory of money.

Essence nominalistic theory: money does not have its own value and is a purely conventional abstract unit, a simple label and counting symbol established by the state. Proponents of this theory believed that money has no internal connection with goods and receives its power from the state. Views close to the nominalists were expressed by ancient philosophers: Plato and Aristotle.

Money for nominalists has only one function - a means of payment. Money is simply tokens of account, that is, money plays only the role of an intermediary and can be replaced by inferior coins and paper banknotes.

Quantitative Monetary Theory(John Locke) - this theory is now generally accepted and can be formulated as follows: the price level is always proportional to the quantity of money, understood in terms of the velocity of circulation. Locke believed that the influence of changes in the money supply on the level of trade (production) is stronger than on the price level - the concept of “money stimulates trade.”

Second phase development of the quantity theory of money. David Ricardo, John Mill, Jean-Baptiste Say simplified the quantitative theory, making it more rigorous. The quantity theory was interpreted to a greater extent as the law of proportionality between the money supply and the price level.

Third stage(Stanley Fisher, Knut Wicksell, John Keynes, Milton Friedman) - this is the neoclassical period of development of quantitative monetary theory. Special attention at this stage, attention is paid to short-term periods, instability of the speed of money circulation, and not to the proportionality of the quantity of money and prices in the long term, as was the case before.

Three directions of modern quantity theory of money differ slightly:

Transactional theory as described in Fisher's work;

The theory based on the category of cash balances, developed by Alfred Marshall, Leon Walras, Knut Wicksell;

Income-based theory developed by Dennis Robertson and John Keynes.

Keynesian theory of money(John Keynes): We will not be able to explain the events taking place in our economy if we first ignore money and financial relations, and then just kind of “superimpose” them mechanically on general scheme. Keynes believed that money is a special type of bond. And they appear when banks finance companies acquiring capital property.

4. CONTENT AND SIGNIFICANCE OF THE FUNCTION OF THE MEASURE OF COST. PRICE SCALE. MONEY AS A MEDIUM OF CURRENCY AND A MEANS OF PAYMENT

Money as a universal equivalent measure the cost of all goods. This use of money allows parties to a transaction to easily compare the relative values ​​of different goods and resources. However, it is not money that makes goods comparable, but the socially necessary labor spent on the production of goods that creates the conditions for their equalization. All goods are products of socially necessary labor, so money, which has value, can become a measure of their value.

The cost of a product expressed in money is called price. It is determined by the socially necessary labor costs for its production and sale.

Price scale in metal circulation, the weight amount of monetary metal accepted in a given country as a monetary unit and used to measure the prices of all other goods is called. There are significant differences between money as a measure of value and money as a scale of prices. Money as a measure of value relates to all other goods, arises spontaneously, and changes depending on the amount of social labor spent on the production of a money commodity. Money as a price scale is set by the state and acts as a fixed weight amount of metal that changes with the value of this metal.

With modern money, which is not exchangeable for gold, the price of a commodity finds its expression not in one specific commodity, but in all other commodities, resembling an expanded form of value.

Money in the circulation of goods must be really present. Commodity circulation includes: sale of goods, i.e.

Fiat money

i.e. turning it into money, and buying goods, i.e. turning money into goods (commodity - money - goods). In this process, money plays the role of an intermediary in the exchange process.

The features of money as a medium of exchange include the real presence of money in circulation and the fleeting nature of its participation in exchange. In this regard, the function of a medium of circulation can be performed by inferior money - paper and credit. Currently, credit money has taken a dominant position, acting as a means of purchase and payment.

The function of money as a means of payment arose as a result of credit relations in the capitalist economy. In this case, money is used to sell goods on credit and pay wages to workers and employees.

The identification of this function is associated with the increasing number of cases of sales of goods on credit, as well as a large number of payments made in non-cash form, when the movement of money and goods occurs with a gap in time or place, purchase and sale on credit, i.e. with a deferment of payment of money. Characteristic features of this function of money are its one-way movement and the presence of a time gap between the transfer of goods to the buyer and money to the seller. Money as a means of payment differs from money as a means of exchange, since it does not mediate, but only completes the purchase and sale.

5. FUNCTION OF STORAGE MEDIUM. TYPES OF CASH SAVINGS. MONEY IN INTERNATIONAL CIRCULATION. QUANTITY OF MONEY SUPPLY

Money is the most liquid asset(i.e., the one that is easiest to spend), they are a very convenient form of storing wealth. This function appears due to the spatial and temporal separation of acts of sale and purchase. If a commodity producer, having sold his goods, does not buy another product for a long time, then the money withdrawn from circulation performs the function of creating treasures.

Credit and paper money cannot perform the function of a means of creating treasures, since they do not have their own value, but they have a representative value; they can perform the function of a means of accumulation, derived from the function of treasures. A necessary condition for this is that the amount of money corresponds to the laws of monetary circulation.

The accumulation of funds can occur in the form of: bank deposits; – investments in securities; acquisition of precious metals, currency, real estate.

Inflation reduces the purchasing power of today's money tomorrow, making saving in today's money economically unviable. It pushes investors even further into the financial market.

Money in the field of international economic turnover: this function of money was fully developed with the creation of the world market. World money has the following purposes and serve:

A) universal means of payment - in settlements on international balances, mainly on the payment balance; b) universal means of purchase - used when purchasing goods abroad and paying for them in cash; V) materialization of public wealth - are a means of transferring national wealth from one country to another when collecting indemnities, reparations or providing loans.

The amount of money needed to carry out the functions of money became important when it ceased to regulate itself, that is, paper money appeared.

Amount of money needed= (Sum of prices of goods and services sold – Sum of prices of goods sold on credit, the payment period for which has not yet arrived + Sum of payments on obligations – Sum of mutually extinguishing payments) / Average number of turnovers of money as a medium of circulation and means of payment.

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Types, forms and functions of money

Money is the basis of the state's monetary system. In each country, the form of organization of monetary circulation corresponds to the accepted legislative acts. IN political economy There are two approaches to substantiating the nature of money - nominalistic and metallic.

Representatives of the nominalist movement argued that money represents signs of value and conventional units of account. They did not recognize the commodity nature of money and the possibility of its use as a measure of value. Lawyers argued that the metal content of coins was immaterial to their value. Nominalistic ideas were used to advocate the issue of paper money, including to cover government spending. American economist P. Samuelson considered money an “artificial social convention” that allows comparison different types goods.

The ideologists of merchant capitalism - mercantilists - substantiated the need for economic circulation of hard, stable money, full-fledged coins; they opposed the release of money substitutes into circulation. The main thing for them was the theory of “money balance” - a policy aimed at increasing the country’s monetary wealth and replenishing the treasury, focusing on sums of money from the sale of imported goods were spent on the purchase of local products. It was believed that the greater the difference between the value (price) of exported and imported goods, the richer the state.

The popular quantity theory of money is devoted to the causes of changes in the value of the relative value of money, i.e. their purchasing power. The main proposition of this theory is that the value of money (both real and its substitutes) is determined by its quantity. In accordance with this theory, goods enter into circulation without a price (value), as well as a monetary metal (gold) - without internal value, and on the market the ratio of the mass of gold and the mass of goods determines the prices of goods and the purchasing power of gold.

Money arose during the period of decomposition of the primitive communal system, completing the process of long-term development of the forms of value of goods. Money being an expression social relations, began to be used both as a means of exchange and as a unit of account.

IN modern theory monetary circulation distinguishes certain functions of money: a measure of value; medium of exchange; instrument of payment; means of storage; world money.

The original function of money is associated not only with trade exchange, but also with resolving issues of political, social and religious significance. The function of the measure of the value of money is considered as the main one. Money acts as a generally recognized commodity - the equivalent of other goods, a universal meter with the help of which goods have the value of their value. For example, if a certain weight unit of gold (or silver) is obtained when selling a product, this is its price. This means that price is the monetary expression of the value of a product.

To express the value of a specific product, it is not necessary to have money; it is necessary to know the situation on the market, namely in what proportions a unit of gold (silver) is exchanged on average for miscellaneous goods. Money with a very large denomination, purchasing power which are so high that they are not suitable for ordinary trade transactions are usually called counting.

Dividing a unit of measure into parts reveals the scale of prices. This makes it possible to sell or purchase goods for a price calculated as a fraction of the main monetary unit.

When coins first began to be minted, the price scale coincided with the weight scale of the corresponding metal. For example, the pound sterling was originally a pound of silver as a currency. In subsequent years, the price scale was separated from the weight scale.

The scale of prices is established prescriptively, and real prices, expressed in precious metal as a measure of value, are determined by the laws of commodity economy. This means that the price of a product is directly proportional to its value and inversely proportional to the value of money.

It should be clarified that price is a form of manifestation of value (exchange value) when exchanging a product not for any other product, but only for money (gold or silver or banknotes representing them). Consequently, the price of a product can increase with an increase in the value of the product and a decrease in the value of money, as well as with a faster increase in the value of the product compared to the increase in the value of money, or with a more rapid decrease in the value of money compared to the decrease in the value of the product.

Note that the discovery was in the 18th century. rich gold deposits in Brazil led to a sharp decline in the price of gold, which caused European countries significant increase in prices for goods.

The possibility of replacing real money with signs, symbols of value (including paper banknotes) follows from the nature of the function of money as a medium of exchange. In this function, money acts as an intermediary in the exchange of goods, but it is necessary that banknotes have social significance, i.e. Such money is issued by the state, which legislatively gives it a forced value (rate).

Paper money is banknotes, the monopoly right to issue which initially belongs to the state government. They are usually called treasury notes or treasury bills.

They represent short-term treasury obligations issued to service retail trade turnover and to cover government expenses in this area. Initially the function of a medium of exchange precious metals performed in ingots, which were taken by weight. In Russia, paper money (assignats) were first issued in 1769.

Money as a measure of value and money as a medium of exchange are interconnected. They function as a measure of value and are used as a medium of exchange. Money could not be a medium of exchange if it were not a generally accepted measure of the value of all goods.

If the seller does not convert the proceeds into another product, then his money becomes accumulated funds. Accumulated funds do not completely leave the sphere of circulation; if you put them, for example, in a bank, then they can participate in the turnover of other segments financial market. They accumulate treasures in vice real (gold and silver) real money or in the form of objects made of monetary metal (including gold and silver bars). The market for gold, silver and other precious metals is expanding regardless of their monetary function.

If the goods are received with subsequent payment by a certain deadline, with the onset of such a period the debtor fulfills his monetary obligation, and then money performs the function of a means of payment, i.e. the function of reimbursing the seller for the cost (price) of the product after a certain time. IN in this case The use value of a commodity is at the disposal of the buyer before the value of this commodity is in the hands of the seller. As a means of payment, money (its signs) can also function in payment of labor and the fulfillment of other financial obligations.

In the West, the earliest issues of paper money in the form of bank notes were carried out in Sweden and the USA (mid-17th century), and in France (1716). In Russia, the first paper credit money was released into circulation in 1841.

At the beginning of the 20th century. in the USA there were at least 5 thousand issuing banks, each of which had the right to issue banknotes in circulation for the amount of its fixed capital. Moreover, each of the national banks was obliged to accept notes from all other banks as payment. As a result, the need arose to establish a central bank in the country with the right to monopoly issue money (or its symbols). Central bank notes like his promissory notes on demand - these are modern “paper” banknotes.

World money appeared with the formation of the international (world) commodity market. In this market, money appears in the form of precious metal bars. In world circulation, gold and silver were a universal measure of value, a universal means of payment and a means of circulation.

It is customary to distinguish between the economic and non-economic spheres of the use of money. The functions listed above belong to the first sphere, since money (money signs) participate in the economic process, serving the exchange of goods (works, services). But even in this area, money (its signs) can also perform other roles, namely:

• prepayment function, which means that the seller of a product receives its value (price) or part of it even before the buyer receives the use value of the product;
• the function of fulfilling tax and other monetary obligations when there is no standard commodity exchange;
• the lending function, when money (its signs) moves in economic circulation with a return to its owner;
• function as a means of insuring processes against unfavorable development;
• the function of guaranteeing the execution of a transaction or monetary obligations.

Money surrogates are also used in settlement practice. They are called financial instruments(substitutes for money), not considering them to be legal means of circulation and payment. They are used for mutual settlements of transactions, for example in barter settlements, or when paying for labor material assets instead of money, etc.

Another concept - quasi-money - is used in relation to other financial transactions, including bills of exchange used in settlements (payments) to terminate debt.

So, according to their natural and functional characteristics, there are three main types of money, reflecting their historical evolution:

• commodity money (commodity money);
• full-bodies money;
• fiat money.

Within each type, forms of money are distinguished (their external presentation or design). The evolution of forms is based on the search for more advanced and convenient payment instruments, including those that ensure savings on transaction costs.

Fiat money and its forms

Let us consider the main forms of commodity circulation and highlight:

1) animalistic form (animal-animal). The function of an equivalent form of value was performed by various animals or things derived from them (cattle, furs, shells, corals, etc.). For many peoples, cattle played the role of money;

2) vegetative form (vegetable - plant, fruits, including grain, tobacco, etc.);

3) hyloistic form (hyle - substance). The functions of money were performed by various minerals and metals, tools made from them (stones, salt, amber, etc.).

The monetary form of value appeared in the 3rd millennium BC. in the form of copper and silver money. Some states, including the Greeks, had their own metal money (ingots of gold and other metals, which were accepted by weight) before the advent of coins.

Metal money was used in the forms of metal tools (copper and bronze), metal jewelry, and gold dust. It is believed that coins first appeared in Ancient Greece. Development of industry by the 15th century. allowed to increase the extraction of minerals, primarily silver and gold. Silver was mined in large quantities by Germany, the Czech Republic, and Hungary, and Transylvania was a place of gold mining.

Full-fledged money is money whose purchasing power (the ability to express the value of all other goods) is based on the value of the precious monetary metal. They took the form of metal cash bars and coins. The first coins were irregular or square, then round. The obverse side of the coin is called the obverse. reverse side- reverse, and the side (rib) - edge.

At first, coins were just one of the varieties of metallic universal equivalents. The appearance of gold coinage meant new stage in the history of European monetary circulation.

Subsequently, precious metal bars began to be given a certain standard shape and a corresponding stamp was placed on them. Thus, money received a coin form and a nominal value. Minting coins generated income. The difference between the denomination of a coin and the market value of the monetary metal spent on its production is called share premium, or seigniorage.

The release of ancient Russian coins (with the image of Christ) was timed to coincide with the baptism of Rus'. Historians believe that the main monetary unit of Ancient Rus' was the hryvnia kun. Then the ingot became the first ruble - the Novgorod hryvnia or half-hryvnia (hryvnia cut in half). It is believed that the ruble (possibly from the word “to chop”) appeared when dividing silver payment bars (XIII century).

The beginning of the minting of Russian silver coins for mass monetary circulation dates back to the 2nd half of the 14th century; the settlement (counting) ruble (ingot of standard weight and shape) began to correspond to a fixed number of coins, which gradually decreased in weight. At the end of the 14th century. coins were minted by many appanage principalities, and in Rus' a variety of coins of various weights and designs appeared.

At the beginning of the 16th century. as a result of the centralization of monetary affairs in Rus', mints remained in Novgorod, Pskov, Moscow and Tver. Moscow and Tver “beat” the Moscow dengue (“Moskovka”), whose weight was 0.4 g, as well as the middengue (about 0.2 g). In the early 30s. XVI century coins began to be trimmed to bring old coins to the correct weight. In the 2nd half of the 19th century. Among the noble metals, gold was the leader as a single equivalent.

In the monetary circulation of Ancient Rus', gold bars played a more significant role than in the West. The minting of coins in Kievan Rus began earlier than in many European countries.

On "Novgorodki" they began to mint a horseman with a spear, which is where their new name came from - kopeynaya denga, or kopeck.

“Moskovki” with the image of a horseman with a sword were called “sword dengi” or simply dengi. Poludengs were renamed “polushki” (with the image of a bird). In different states, the minting and circulation of coins from precious metals was combined with coins from base metals (mainly copper, and later from various alloys). Coins made of precious metals gradually wear out as they circulate, and their weight naturally decreases. But in market transactions they continue to circulate at face value while maintaining their purchasing value, and some rulers began to reduce the actual amount of precious metal in their coins. However, the denomination of full-fledged money must correspond to the market value of a certain monetary metal.

In 1534, the first monetary reform was carried out and unified national banknotes appeared in the country for the first time, and a monetary system was created.

A transitional form is considered to be banknotes (debt obligations of banks), the issue of which is fully or partially backed by reserves of monetary metal.

The main forms of fiat money are cash bills and coins issued by the central (issuing) bank; deposits in the commercial banking system; electronic non-cash funds.

Cash bills and coins are means of payment. In economic essence, they are a debt obligation of the state, and deposit and electronic money are a debt obligation of the issuer.

Modern cash is special; it cannot be exchanged for monetary metal. The composition of cash is dominated by paper bills (95-97%), the rest is made up of coins

After the appearance of banks in the 10th century. to simplify calculations for coins made of precious metals appears the new kind substitutes - paper money. There are two types of paper banknotes: government notes issued by the treasury (treasury notes), and bank notes or banknotes issued by banks (bank notes).

Treasury bills are usually called simply paper money, in contrast to banknotes, which by their nature are credit money. Their release was limited by the amount of full-fledged money (the amount of gold money) necessary for circulation in a given period.

Credit money arises as a means of payment, the development of which occurs on the basis of capitalist credit. They look like credit bills, banknotes. A banknote is a bank bill. The banknote is a perpetual obligation of the issuing bank, subject to earlier exchange for gold upon sight. When discounting bills, the bank issued banknotes into circulation, one type of credit money was replaced by another. When paying bills, the banknotes were returned back to the bank.

In the XVI-XVII centuries. appeared non-cash payments, as well as a new form of credit money - a check as a written order from the account owner to the bank to transfer a certain amount of money to the owner of the check.

With the cessation of the exchange of banknotes for gold, the mechanism of bank issue underwent significant changes, and at the same time the nature of banknotes also changed. Along with commercial bills, government bonds and treasury bills began to be used as legal security for banknotes.

In the 20th century Almost all monetary circulation was reduced to the circulation of paper and base money substitutes (with the exception of individual transactions with precious metals in interstate relations).

With the cessation of the exchange of credit money for gold and their depreciation, the official scale of prices lost its economic sense. As a result of the currency reform of the capitalist world of 1976-1978. (based on the Jamaica Agreement) the official price of gold and the gold content of monetary units were abolished. Essentially, scale manifests itself when the values ​​of goods are compared through price.

In the 20th century The use of cash began to decline, and non-cash payments and deposit money began to dominate in payment turnover. This is due to the development banking system and organization of non-cash payments. Currently, deposit money is put into circulation by opening current (transaction) bank accounts. And the development of electronic payment systems led to the emergence electronic money.

Based on the characteristics of the channels for the entry of money into monetary and economic circulation

Ending

Irreplaceable credit money

Based on the nature of the issuer (the process of denationalization of money)

Based on the material substance (carrier)

Unlike paper money generated by government needs, the emergence of credit money is associated with credit relations, credit operations and the development of banking.

Irreplaceable credit money, money substitutes, money signs, symbolic money, money substitutes. As a result of objective processes, the prerequisites began to take shape for the transition to a new form of money - fiat credit money. The objective need for the appearance of credit money was:

„ in creating elasticity money turnover, the ability to expand and contract if necessary;

„ saving cash (gold) money; „ development of non-cash payments.

The prerequisites (factors) for this transition were: a) the objective process of replacing full-fledged money with inferior ones due to their fleeting use (constant change of owner) and the acquisition of the status of symbolic money as an “intermediary” in the circulation process; b) development of credit relations; c) strengthening the state, which uses inferior (paper) money to cover its expenses and legitimizes it with the power of authority; d) an increase in the need for money due to the rapid development of commodity-money relations.

Credit money- this form of money generated at a certain historical stage by the development of credit relations. The content of fiat credit money is determined by two principles. Firstly, having become irredeemable for precious metals, money began to carry the content of the “advanced” - trust (or credit) value. Secondly, one of the most important features

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credit money is that its release into circulation is linked to the actual needs of circulation, which presupposes the implementation credit operations with real reproduction processes. A loan is issued, as a rule, against collateral, and repayment of loans occurs when the balance of valuables decreases. Thus, linking the volume of means of payment provided to borrowers with the actual need for money turnover is achieved. This feature represents the most important advantage of credit money.

If the connection with the needs of turnover is disrupted, credit money loses its advantages and turns into paper banknotes, i.e. they go into circulation without the necessary connection with the needs for banknotes. Thus, the most significant difference between paper and credit money is the peculiarity of their release into circulation.

Credit should be the main mechanism ensuring the supply of credit money, since this emission channel better meets the needs of the economy and contributes to its growth. In modern conditions, most of the credit money is funds in various accounts of credit institutions. Central banks provide sufficient guarantees for credit money (which private banks cannot provide in the modern scale of money turnover), therefore, at present, the circulation of money is carried out mainly in the form of non-cash payments. At the same time, credit money has no intrinsic value. However, unlike paper money (treasury bills), from the moment of their inception (in the classical sense) they act as a sign not only of gold, but also of credit and reflect the movement of loan capital between lenders and borrowers.

The credit nature of money follows from the fact that all banknotes are obligations for part of the social product. In the broadest sense of the word, these are the obligations of the state to provide upon first demand necessary goods. In a narrow sense, it is money provided commercial banks as a loan to business organizations, subject to repayment within a specified period. In the specific sense of the word, this is money that continuously flows into the bank from trading organizations in order to repay loans for goods in circulation.

Visually, paper and credit money do not differ. Among the first credit instruments there were bills of exchange, namely bills of exchange, which at first were not used as a means of payment, because their endorsement was prohibited. K. Marx called them “mercantile”

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money. Commercial bills had a number of restrictions on their use in domestic circulation: by territory, in time, between all participants in the turnover, by the face value (value) of the securities, and guarantees. Because of this, they could not gain universal recognition. But the light weight, low cost and ease of making a bill (no expensive metal or mint required, just write on paper and sign), private legal nature bills (an abstract obligation of a merchant or industrialist to pay a certain person within a specified period, a specified amount of precious metals) forced them to crowd out other types of money from circulation.

Release credit funds into circulation is reduced to the issue of deposit money, electronic money, bills, checks, plastic cards, which replace real money with credit money and financial instruments, while reducing circulation costs.

Credit money “is legally equivalent to cash » , are used to organize a system of non-cash payments, “perform the role of a means of circulation... making payments through a system of bank accounts, not simultaneously with the sale of goods... Either the seller or the buyer credits counterparties, creating a creditor or accounts receivable" Liquid and credit money represent a unity of opposites. In liquid money, the basis is liquidity, in credit money the basis is obligation, and the sign of liquidity is a shade of convention.

Characteristic features of irredeemable credit money:

„ have no intrinsic value, their nominal value exceeds their real value;

„ are subject to depreciation, they are physically impossible to use as a product;

„ have lost the property of elasticity, perform the function of a scale of prices and money of account, do not measure, but commensurate the prices of goods;

„ The nature of inferior money is credit.

Modern money has completely lost the commodity nature of full-fledged money, but there is an opinion according to which money remains a commodity - a specific, unique monetary commodity, “traded” on the market.

The legal side of modern money is that the state monopolized the issue of cash and non-cash money.

Information side money is that it becomes the language of the market. In modern conditions, fiat money is called substitutes for full-fledged money, signs of money,

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substitutes for money- such substitutes that retain the most important properties of money and perform all its functions.

Taking into account the nature of the movement of money, they are divided into cash and non-cash money. Cash in circulation (CDVO)

(monetary aggregate M0) - the most liquid part of the money supply, available for immediate use as a means of payment (Table 3.2). NDVOs include banknotes and coins in circulation. The term “cash” in circulation literally means the circulation of money in the hands of the population, and the movement of cash through bank cash desks means its circulation.

Non-cash money. In the structure of non-cash funds, one can distinguish both non-cash money and non-cash funds, quasi-money. Non-cash money include balances of non-financial and financial (except credit) organizations and individuals on settlement, current, deposit and other demand accounts (including accounts for settlements using bank cards) - deposit money or transferable deposits.Non-cash funds include balances on fixed-term accounts opened in existing credit institutions in foreign currency Russian Federation, as well as accrued interest on both types of transactions.

Based on the characteristics of the channels for the entry of money into monetary and economic circulation, a distinction is made between endogenous and exogenous money.

Endogenous money(English) endogenous money) are determined by the demand presented by various organizations and individuals. The use of endogenous money makes it possible to satisfy the demand of organizations and individuals for money and loans, improve credit products, increase bank profits and influence the revaluation (devaluation) of the currency. The existence of endogenous money is an expression general principle market economy - demand creates supply - and means that fluctuations in the volume of money supply follow fluctuations in the demand for money. Endogenously determined parameters include employment and output levels, inflation and unemployment levels, etc. Endogenous

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the parameters of money are associated with the development of a financial system that is able to independently satisfy the economy’s demand for monetary assets, primarily through the creation of money itself, quasi-money and surrogate money, minimizing the state’s emission policy. Endogenous money accelerates the development of the banking system, the rate of economic growth of industrial enterprises, increases tax revenues to the budget, and prevents sharp revaluation. Endogenous money arises and is destroyed only as a result of fluctuations in the demand for money.

Exogenous money(English) exogenous money) turns commercial banks into passive conductors of the central bank’s monetary policy. The dynamics of the volume of exogenous money supply is determined by the strategy of the central bank. As exogenous parameters in macroeconomic models government spending, the tax rate and the amount of money supply are factors. Exogenous money makes it possible to implement the chosen directions of the monetary policy of the central bank, but at the same time they contribute to revaluation and force credit organizations to carry out passive monetary policy. Unsatisfied demand for money caused by the predominance of exogenous money contributes to revaluation national currency. A hard national currency is a positive factor for the development of the country's economy, but only if the goods produced are competitive. Revaluation is beneficial to importers, who receive additional income in the form of exchange rate differences. In addition, the demand for money, especially financial demand, is elastic, and it is obvious that for a country whose main task is the revival and development of national production, the creation of an exogenous money supply is unpromising. A stable, directed and regulated demand for money on the part of the central bank and a stable demand for money on the part of business entities will reduce exogenous channels for the release of money into circulation.

The demand for exogenous or endogenous money is directly related to: „ with preferences economic entities(an example of this kind of dependence can be the functions of consumption or investment

tional demand); „ technological dependencies in the economy (for example

can serve as a production function showing the relationship between production volume and factors of production);

„ „ structural changes in economics (for example, determining aggregate demand, unemployment, inflation);

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„ „ institutional dependencies, arising from the norms and rules institutionally established in the economy (these include the function of tax revenues as a dependence on the amount of income and the established tax rate).

Based on the above, the following conclusions can be drawn. In the conditions of the Russian economy, it is necessary to ensure an optimal ratio between the magnitude of the exogenous and endogenous money supply, which will allow both to carry out an effective anti-inflationary policy of the Bank of Russia and to finance production.

industrial enterprises.

One of the features of modern money is its dematerialization. Dematerialization of money means the primary use of non-cash money that does not have a tangible form in the form of account records or in computer memory. The dematerialization of money began to occur at the end of the 20th century, when the share of cash began to decline. Money began to act to a greater extent as a real instrument of exchange. If in commodity money the real component prevailed over the obligatory one, in gold money the real and obligatory sides coincided, then with the emergence of paper money the obligatory side begins to prevail over the real one.

Historically, money came out of the material (commodity) form, however, with the development of commodity exchange and the emergence of inferior money, when banknotes ceased to represent the promise to pay absolutely liquid assets against them, the obligatory component of money begins to dominate. Currently, cash acts as a liability of the Central Bank of the Russian Federation. Article 30 of the Federal Law of June 10, 2002 No. 86-FZ “On the Central Bank of the Russian Federation (Bank of Russia)” (hereinafter referred to as the Law on the Bank of Russia) states: banknotes and coins of the Central Bank of the Russian Federation are unconditional obligations of the Bank of Russia and are secured by all of its assets. Banknotes and coins are required to be accepted at face value for all types of payments, for crediting to accounts, deposits and for transfer throughout the Russian Federation. Cash cash along with others liquid assets form the monetary base in the economy.

The material component of cash is preserved, but the material characteristics of money have their own specifics: the usefulness of a banknote is determined by its purchasing power; it is impossible to use this thing in any other way.

The nature of non-cash money is also of an obligatory nature. Non-cash money - credit balances on various accounts

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upon demand of bank clients who are subject to Chapter 45 Civil Code Russian Federation (GKRF), i.e. These are accounts for settlement transactions. From a legal point of view, an entry in a bank account is a quantitative expression of an obligation - the client’s right of claim against the bank, which does not prevent the recognition of this obligation as money. Deposit money (transferable deposits) represent the obligations of a commercial bank to its clients (obligation to maintain an account, to write off money, to credit money to an account, to accrue interest). They are secured by the asset structure of commercial banks.

The development of forms of money also occurs under the influence of the nature of the security. There are money with gold content and backed by central bank assets: fiduciary and fiat money.

Money with gold content- this is full-fledged money, exchangeable for gold and silver, requiring real reserves of gold. In this case, the gold content of money acts as a technical side, as a measure of value - the weight content of gold in one monetary unit of the state, i.e. scale of prices in conditions of circulation of full-fledged money.

In conditions of irredeemable credit money and due to the demonetization of gold in 1920-1930. it ceases to perform the functions of circulation and payment and an international means: the gold standard is first established in a reduced form - the gold bullion iso-lot coin standard, and as a result of the Great Depression, the gold standard is abolished in all countries and money is received golden provision assets of the central bank, which include international reserves of the Russian Federation (MR RF), government securities, goods. The issue of cash is of a fiduciary (obligatory) nature. The Bank of Russia actually pays with securities that it issues itself. The emission limits in such conditions are determined indirectly, namely by the stability of the national currency.

Fiduciary money(lat. fiducia- confidence; English fiduciarymoney) - means of circulation that have no intrinsic value, in particular paper money that is not backed by a reserve of precious metals. The issuance of fiduciary money developed when the growth of production, primarily industrial, began to be restrained by the framework of gold standards (gold coin or gold bullion).

In modern monetary systems, the issue of money is not initially based on the presence of a commodity reserve in the form of gold or other jewelry, and therefore is fiat. Fiat money (lat. fiat- decree, instruction, “so be it”) - money for which

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the state establishes value, provides and guarantees them with its authority and power, money, whose value is determined solely government decree. Such money does not have an independent value, or it is incommensurate with the assigned denomination. These include bank notes and other media, the value of which in circulation is fixed by the amount written on them. The latter far exceeds their internal value (the production price of banknotes, etc.), however, real purchasing power may vary depending on the state of the economy and on confidence in the issuer (usually the central bank of the country).

Are the fiduciary and fiat contents of money different? The term "fiduciary money" began to be used officially in 1844 with the passing of the Banking Charter Act in England. At this stage, the owners of fiduciary money had the right to exchange it at the bank for a full gold equivalent.

The term “fiat money” appears in 1878. After the collapse of the Bretton Woods gold standard system in 1971-1973. The exchange of fiduciary money for the gold equivalent has been completely abolished, which is why most national currencies are now fiat, including the US dollar, euro and other reserve currencies. In addition, some currencies are based on trust, while others are called money only at the will of the state.

Based on the characteristics of the functions performed, ideal and real money are distinguished.

Ideal money- mentally imaginable money, which is used in the function of money as a measure of value, the scale of prices and money of account, serves for the purposes of pricing (with their help the prices of various goods are determined and correlated).

Real money- This is money that is used in all other functions.

Based on the nature of the banks’ obligations, the following are distinguished:

government money: banknotes, coins, treasury

private (credit) money: deposit money, electronic

„ “financial money” (the latter term has not been established in economic science for objective reasons, which will be discussed below).

Government (liquid) money. Acceptance of a particular form of money depends on the recipient's confidence that any third

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the party will subsequently accept this money in the transaction. These days, any form of money is denominated in a specific currency. Society interchangeably uses various shapes and types of money, provided that they are expressed in the same currency. This is supported by two factors: first, the presence of a form of central bank money that is supported by the state; secondly, the convertibility of all types of money into central bank money.

Using the same currency, settlement participants become the owners of a common measure of economic value, a means of storing value and a set of tools and procedures for transferring this value.

The central bank, by definition, is not subject to bankruptcy. Cash and balances in central bank accounts have absolute liquidity compared to credit money, so they can be called liquid money.

The properties of state (liquid) money are as follows: they have universal exchangeability, the power of legal tender, have a credit nature, and act as obligations of the central bank. All money supply in the country’s economy “... are issued by three types of institutions: commercial banks, the state treasury and the issuing bank.” Modern government money - banknotes and coins - are issued by issuing banks and the treasury.

Private money. In modern Western economic theory, supporters have appeared denationalization of money, i.e. theory weakening government regulation monetary circulation by central banks. They consider it necessary to remove the state from the banking system and virtually eliminate monetary policy.

The general price level, according to supporters of this concept, could be determined on the basis of money of account, and its purchasing power could be maintained through competition between credit institutions that issue money into circulation. A. Hayek, based on his idea of ​​money from the position of the functional approach, puts forward a theory private money. In his opinion, in legal terms legal tender, or legal tender, means nothing more than money issued by the government, which the creditor cannot refuse when the money is paid for the debt due to him. Money can exist (and has existed) without any government involvement. The joint circulation of gold and silver coins is a form of parallel exchange.

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currency growth. In different regions of the world, it is possible to create a number of institutions that have the right to freely issue competing banknotes and demand bills, denominated in their own, private units, A. Hayek believes. In practice, private money - credit obligations commercial banks - gave birth to new uniform money - credit money.

Financial money. There are also controversial approaches in the works of domestic economists. In his work M.A. Tailor distinguishes three forms of money: natural, credit and financial. To the memory of M.A. Portnoy, the modern stage of development of commodity-money relations corresponds to a certain form of money - financial money, which expresses “the value of business as a commodity.” “Financial money is a full-fledged modern money that expresses the value of sources of income and serves the process of accumulation. The development of the joint-stock form of capital turns a business into a commodity and involves securities into circulation,” which, according to M.A. Tailor, and are modern money expressing the value of a business. Tailor identifies the following types financial money: shares (they are an important type of financial money in which the value of a business as a commodity is expressed); government and corporate bonds; mortgages; bills; savings and certificates of deposit. “Ordinary shares...,” for example, the author writes, “are a type of financial money intended to express the value of a business as a commodity. This money functions as a measure of value and a store of value.” The author believes that securities do not perform the function of a medium of exchange, therefore, in the work it fades into the background, and the main functions of money in modern market economy are two functions: a measure of value and a means of accumulation. In the literature, this approach is considered controversial.

K. Marx said that “since gold money in the process of circulation itself becomes a simple sign of its own value, it can be replaced by simple signs of value.” The function of money as a measure of value already contains the possibility of replacing real money with paper money. This is due to the fact that:

• the scale of prices is conditional and regulated by law;
• in the names of money the consequences of value relations are gradually smoothed out (in the process of circulation of money)

There are two types of paper money: government issued by the treasury (treasury notes) and banks (bank notes or banknotes). Treasury notes are usually called simply paper money, in contrast to banknotes, which by their nature will be credit money. Historically, paper money arose earlier than credit money; banknotes will continue with the development of credit relations.

The first paper money appeared in China in the 12th century. n. e., in Europe and America - in the 17th-18th centuries. In Russia, paper money (assignats) was introduced in 1769.

Paper money will be signs, representatives of full-fledged money. Circulating signs of value take the form of symbolic money, which is facilitated by the fleeting nature of their circulation, as well as the fact that their forced exchange rate is sanctioned by the state. Initially, the issue of paper money was limited to the amount equal to the amount of gold required for circulation. It is worth noting that they express the obligations of state power and have become an instrument of circulation, a method of government payments against debts, a means of payment aimed at generating income to replenish the state treasury. Their possible depreciation is associated not only with rising prices for goods and services, but also with a possible change in government power and undermining the population’s trust in the state. Paper money is not exchanged for precious metals and is not determined by the need for trade turnover. Their issue is mainly due to the need to finance government spending and the budget deficit. It is quite acceptable to over-issue paper money, which causes its depreciation.

Based on all of the above, we come to the conclusion that money can be used as a substitute for gold in fulfilling its main function - a medium of circulation, i.e. indirectly replacing gold, they are purely tokens of the value of all commodities in circulation. Paper money itself cannot serve as a commodity; at first it was freely exchanged for gold at par. Their two main functions are: a measure of value and a medium of exchange.

The main reasons for issuing paper money will be:

• needs of the state treasury for resources caused by shortages state budget;
• the presence of historical periods characterized by the government’s urgent need for money (wars, revolutions);
• a chronic deficit in the country's balance of payments, when the government, trying to avoid the leakage of gold abroad, is forced to introduce money that is not redeemable for gold, provided with a forced exchange rate, in order to obtain emission income;
• physical wear and tear of coins, turning full-fledged coins into signs of value, and in some cases, deliberate damage to coins by the state, leading to a decrease in the metallic content of coins in order to generate additional income for the treasury.

Paper money issued by the Treasury is based on the redistributive function of the state, on its ability to exercise non-economic coercion. Paper money will not be a government debt. With all this, their release can be considered as a specific form of forced financial subsidy from society to the state.

Paper money- ϶ᴛᴏ banknotes issued to cover the budget deficit and not intended for exchange for metal, but endowed with a forced exchange rate by the state. The real paper value of money is determined by the objective law of monetary circulation: their issue is limited to the amount that would reflect the actual circulation of the gold they symbolically represent. Paper money is mandatory banknotes that replace gold as a means of circulation. They are characterized by instability of circulation and depreciation. It is worth noting that they are not suitable for performing the function of treasure.

Credit money -϶ᴛᴏ a form of money generated by the development of credit relations, the basis of the modern payment and settlement mechanism. It is worth noting that they arise during the period when capital becomes an integral part of production itself, i.e. they will not come from circulation (commodity - money), but from production itself, from the circulation. Credit money belongs to the highest sphere of the socio-economic process and is governed by laws other than ordinary money. The object of exchange relations will not be a commodity in its essence, but commodity capital. The functions of money are realized not by a monetary commodity, but by monetary capital in the form of credit money.

The credit system gave rise to a special kind of credit money, which is banknotes of central banks that are not redeemable for gold and based on them bank deposits(deposit money, which is the basis for check circulation) The bill and banknote arose on the basis of the circulation of debt obligations. K. Marx narrated: “Issuing bills is the transformation of goods into one of the forms of credit money, and discounting bills is exclusively the transformation of these credit money into other money, namely banknotes.” Debt obligations with the maturity date for liquidating the balance of payments required cash; cash had to appear before the due date of payment on the bill, otherwise the production process could be disrupted and slowed down. Based on all of the above, we come to the conclusion that credit money is subject to the law of monetary circulation and the laws of movement of loan capital. Their circulation is connected both with the action of the law of value and the law of surplus value.

There is a gradual evolution of money. Under the conditions of gold monetary circulation, the transition of a monetary value from one function to another occurred without changing its form: from a means of circulation to a means of payment and back. Qualitative and quantitative redistributions of gold as money are resolved through the appearance of signs of gold and signs of value, which represent new forms of money. Gradually, the role of money as a means of payment goes beyond the sphere of commodity circulation. Money becomes a universal commodity of contractual obligations.

Bill of exchange how the first type of credit money arose as a result of the sale of goods on credit. The bill is transformed into full-fledged money from the seller-creditor, giving the buyer-debtor the opportunity to pay not directly to him, but to the bank that issued the promissory note in the form of a bill of exchange. A bill of exchange is a document drawn up according to established by law form and containing an unconditional abstract written promissory note, i.e. ϶ᴛᴏ security.

A bill can be:

• simple (solo bill) - a written promissory note of the debtor to pay a certain amount of money to the owner of the bill within a specified period;
• transferable (draft) - an order from a creditor to a debtor to pay a sum of money to a third party within a specified period.

A promissory note and a bill of exchange will be types of a commercial bill, which can be of two types:

• commercial, arising on the basis of a trade transaction;
• a promissory note or bill of exchange that has no special collateral but is backed by undrawn bank lines of credit.

Other types of bills:

• treasury - short-term government securities (their sale is carried out at a discount to the nominal value);
• financial - long term duties regarding a certain amount of money lent;
• friendly - a bill that is not related to an actual commercial transaction; they are issued to each other by the parties to the transaction in order to receive money by discounting the bill in the bank;
• bronze - a long-term obligation that has no real security.

The features of the bill will be:

• abstractness - the bill of exchange does not indicate the specific type of transaction;
• indisputability - obligatory payment of a debt;
• negotiability - the possibility of transferring a bill of exchange to other persons using an endorsement (endorsement), which creates the possibility mutual offset bill of exchange obligation.

Bill circulation is characterized by elasticity, i.e. ability to automatically expand and contract:

• the growth of bill turnover is associated with the level of development of credit relations and the growth of trade turnover;
• a decrease in turnover with a reduction in the volume of credit circulation and the repayment period of bills.

In the sphere of monetary circulation, a bill of exchange has a limited scope, since it mainly serves wholesale trade, information about the solvency of the persons transferring the bill under endorsement is not always known; a limited number of persons are involved in the circulation of bills. The discrepancy that arises on a large scale between the amount of circulating full-fledged money and the volume of trade turnover is compensated by the expansion of bill circulation. The value of the bill is determined by the value of the goods, the sale of which is serviced by it.

The shortcomings of bill circulation gave rise to the appearance of banknotes. This is a bank note, a credit token of money issued by banks of issue and replacing metallic money in circulation. The notes will be perpetual debt obligations. A banknote differs from both a bill and paper money.

The difference between a banknote and a bill:

• banknotes are not issued industrially and trading companies, and by central banks;
• The notes will be perpetual debt obligations. Modern banknotes are never exchanged for metal, but have a commodity (credit) basis;
• They are universally tradable, since they are issued by central banks, whose solvency is beyond doubt.

Banknote is a debt obligation, a bank credit note, a type of paper money, issued by the central bank as a medium of exchange, a substitute for full-fledged money.

Since banknotes are issued in the order of lending, and loans are subject to repayment upon expiration, the banknotes are ultimately returned to the issuing bank. The issuance of banknotes in the order of lending and their regular return flow to the issuing bank - these are the laws of banknote circulation.

Banknotes can return to the issuing bank not only by repaying the loan. For a long time, banknotes were freely exchanged for metal coins.

The free exchange of banknotes for gold was fundamentally important, since it eliminated the possibility of an excess amount of money and prevented its depreciation in relation to gold. In the 30s of the XX century. In all countries, the exchange of banknotes for gold was stopped and was never resumed.

The absence of direct exchange for gold brings fiat banknotes closer to paper money. Banknotes issued in order to credit trade turnover will be credit money. If the issue of banknotes is used to cover government expenses, then the banknotes actually turn from credit money into paper money.

Fiat notes may be issued in excess quantities and are subject to depreciation relative to gold.

Check is a document established form, containing an unconditional order from the drawer to the credit institution to pay the holder of the check the amount specified in it, and can be used to receive money from the bank, as well as to pay for goods purchased or services received. Checks serve as a medium of exchange. Checks appeared in circulation in the 16th-17th centuries. simultaneously in England, where banks provided their depositors with special books with order forms used for settlements, which were the prototype of modern check books, and Holland, where banks began to issue bearer receipts to their depositors. In conditions of developed commodity circulation, checks play an important role. If retail trade turnover is serviced mostly by cash, then wholesale turnover is accompanied by check circulation. Check turnover significantly exceeds cash turnover.

The economic nature of the check is that: that it serves as a means of obtaining cash from a bank, acts as a means of circulation and payment, and will be an instrument of non-cash payments.

There are many types of checks:

• registered - checks issued to a specific person without the right to transfer to another person;
• order - checks issued to a specific person with the right of transfer by endorsement;
• bearer - checks in which a specific person is not indicated;
• settlement - checks used in the non-cash payment system;
• accepted - the bank agrees to the payment.

2 FIXED MONEY AND ITS FORMS

Fixed (credit) money is called tokens of value, substitutes for natural (real) money. Fiat money includes paper, deposit and electronic money.

The nominal value of credit money is much higher than the cost of the material from which it is made. For example, the highest value of ten paper rubles lies precisely in their use as money, and not in any other capacity.

Fiat money appeared in connection with the function of money as a means of payment, when, with the development of commodity-money relations, purchase and sale began to be carried out in installments (on credit). Initially economic importance fiat money was expressed:

In creating the elasticity of money circulation, the ability to expand and contract if necessary;

In saving cash (gold) money;

In the development of non-cash payments.

The peculiarity of credit money is that its release into circulation is linked to the actual needs of circulation. This involves the implementation of credit operations in connection with the actual processes of production and sales of products. At the same time, linking the volume of means of payment provided to borrowers with the actual need for turnover in money is achieved. This feature represents the most important advantage of fiat money.

Since the 30s of the XX century. In the capitalist world, a system of irredeemable credit money has been established, which in its nature is close to paper money. Modern banknotes are backed mainly by government securities: gold backing and the exchange of banknotes for gold have been abolished in virtually all countries of the capitalist world. Exchange of the US dollar into gold for foreign central banks was discontinued on August 16, 1971.

Qualitative changes in the monetary system determined its instability in the conditions of the general crisis of capitalism. The modern monetary system of capitalism is characterized by the following features:

1) weakening of the connection with gold as a result of its displacement from internal and external circulation;

2) the dominance of credit money that is not redeemable for gold, approaching paper money;

3) issuing money in the form of lending to the economy, the state and for the increase in official gold and foreign exchange reserves;

4) widespread development non-cash turnover and reduction in cash flow;

5) state-monopoly regulation of money circulation;

6) chronic inflation.

2.1 Origin and essence of paper money

The appearance of paper money was objectively determined by the laws of metal circulation, the development of commodity exchange and the state's needs for funds to cover its expenses. The emergence of paper money was the result of a long historical process of gradual separation of the nominal value of money from the real value. The possibility of such a separation was associated with the fleeting nature of the functioning of money as a means of circulation.

During the circulation process, full-fledged coins are gradually erased and lose part of their value. For twenty years in the first third of the 19th century. in Europe completely disappeared as a result of the erasure of 19 out of 380 million pounds. Art., i.e. 5% of all gold.

Countries that had gold circulation, in the 80s. XIX century Every year they lost at least 700-800 kg of pure gold from wearing out coins.

Despite the fact that the actual metallic content of the coins no longer corresponds to their face value, worn-out coins continue to function properly as a means of circulation, just like new coins. Thus, the practice of circulating worn-out coins created objective prerequisites for replacing full-fledged money with their substitutes.

The next step on the centuries-long path to replacing full-fledged metal money with their paper tokens was the deliberate destruction of coins by the state, i.e. the state issuing inferior coins with a reduced content of gold (silver), and then minting silver coins instead of gold, copper coins instead of silver. Damage to coins brought additional income to the state.

The final stage was the issue by the state (treasury) of paper money (in some countries they were called “paper coins”) with a forced exchange rate to cover its expenses (at the beginning of the 13th century - in China, in the 4th century - in Japan, in the 17th century - in in Sweden). Initially, the state, as a rule, exchanged paper money (treasury bills, banknotes) for gold (silver) at official rate, which gave rise to their public recognition. However, the constant increase in the state's needs for money forced it to issue more and more paper money and abandon its exchange for precious metal. At first, paper money (along with deposit money) circulated in parallel with gold (silver) money, then completely replaced the latter. In the end, any connection between paper money and gold was lost; their universal circulation was ensured solely by the power of the issuing state. Paper banknotes are not full-fledged money, but only their signs. This and the fact that paper money is more convenient to handle explains the fact of the transition from metallic money to paper money. The possibility of such a transition is inherent in the function of money as a medium of exchange. Using this opportunity for the practical implementation of the release of paper money into circulation presupposes the presence of two conditions: relatively developed commodity-money relations and the presence of trust in paper money.

They were first issued in the 7th century in China in large denomination notes to replace the inconvenient full-fledged copper money. And as long as the bills could be freely exchanged for full-fledged money, they circulated successfully. Later, in the 13th century, paper money was issued in Persia, and in the 14th century - in Japan.

Relying on the power of state power, it becomes possible to replace gold and silver in circulation, first within a given state, and then in global trade with signs of value. Initially, these signs could be exchanged for precious metals at face value at any time, which allowed them to circulate in circulation as substitutes for money made from precious metals.

Paper money arises and operates alongside gold money, gradually gaining strength and displacing gold money.

In the XII-XV centuries. Merchants, for the convenience of trade, create banks to replace cash payments through them with non-cash, more convenient and safe ones.

In pre-capitalist times, paper money existed only as long as it was freely exchanged for full-fledged money. With the emergence of capitalism, in the person of the bourgeois government, there finally appeared someone whom people could trust. Ample opportunities for the development of paper money are created only by capitalism with its developed credit system.

Paper money (treasury notes) are paper tokens of value issued by the state (represented by the Treasury or the Ministry of Finance) to cover the budget deficit, not exchangeable for gold and endowed with a forced exchange rate.

It is necessary to pay attention to the fact that at present such money is practically not issued.

Paper money was characterized by two features.

The first feature was that they had no intrinsic value of their own. They were inferior money - signs of value; they had a representative value, which determined their purchasing power.

The second feature is related to the nature of circulation: paper money was unstable by nature, i.e. they tended to depreciate. This was caused by two reasons:

1) paper money was issued to cover the budget deficit, i.e. without taking into account (more precisely, in excess of the needs of trade turnover in money);

2) paper money was not exchanged for gold, and therefore the mechanism for removing excess paper money from circulation did not operate; therefore, paper money issued in excess of the needs of trade turnover “stuck” in circulation channels and depreciated.

Thus, paper money is banknotes that are not exchangeable for full-fledged money, issued to cover the state budget deficit. The difference between the nominal value of issued money and the cost of issuing it (costs of paper, printing) forms the treasury's share premium, which is an essential element of government revenues. The issue of paper money should be limited to the amount of full-fledged money needed for circulation in a given period, in other words, the amount of gold money that it replaces in circulation.

However, the emergence and then growth of the state budget deficit caused the expansion of the issue of paper money, the size of which depended on the state’s need for financial resources. The issue (issue) of paper money is determined not by the need for commodity circulation, but by the deficit of the state budget. But no matter how much paper money the state issues, they will only represent the amount of full-fledged money that they replace in circulation. This is the essence of inflation, that is, a decrease in the purchasing power of paper money. But the depreciation of money can also occur for other reasons: a decline in trust in government, passive balance balance of payments.

Paper money performs two functions: a medium of circulation and a means of payment. The economic nature of paper money excludes the possibility of stability of paper money circulation, because their release is not regulated by the needs of trade turnover, and there is no mechanism for automatically withdrawing excess paper money from circulation. As a result, paper money, stuck in circulation regardless of trade turnover, overwhelms circulation channels and depreciates.

Depreciation of money is a decrease in the purchasing power of a monetary unit. Let us consider the mechanism of depreciation of paper money as a result of their issuance in excess of the needs of trade turnover in money. For example, the commodity turnover need for money (at a given price level, the quantity of goods sold and the velocity of money circulation) is $2000 billion. If the nominal value of the paper money supply in circulation is $2000 billion, then the representative value and purchasing power of the entire money supply will be 2000 billion dollars, and the representative value and purchasing power of one monetary unit is 1 dollar (2000:2000), i.e. equal to its face value.

If the nominal value of the money supply is equal to 4000 billion dollars, then the representative value and, therefore, the purchasing power of the entire money supply will be 2000 billion dollars (since the need for trade turnover in money is equal to 2000 billion dollars), and the representative value and purchasing power of each the monetary unit will be below par – 0.5 dollars (2000:4000). In other words, the money supply will be exchanged for the same commodity supply, but at new prices - twice as high. An increase in prices will lead to an increase in the trade turnover's need for money: it will rise to $4,000 billion. As a result, the amount of money in circulation will become equal to the trade turnover's need for money (at a new, higher price level).

Money depreciation comes in two forms:

In internal depreciation - in relation to goods on the domestic market, i.e. in rising prices for goods;

In external depreciation - in relation to foreign currency, i.e. in the depreciation of the national currency.

Reasons for depreciation:

Excessive issue of paper money by the government;

Decline in confidence in the issuer;

Unfavorable ratio of exports and imports of the country.

The inevitable companion of paper money is inflation. It arises due to the impossibility of spontaneously adapting paper money to the needs of trade turnover and the use by governments of emissions to cover the state budget deficit.

There are two types of paper banknotes: government issued by the treasury (treasury notes) and banks (bank notes or banknotes). Treasury bills are usually called simply paper money, in contrast to banknotes, which by their nature are credit money. Historically, paper money arose before credit money. Banknotes appear with the development of credit relations.

K. Marx wrote that “since gold money in the process of circulation itself becomes a simple sign of its own value, it can be replaced by simple signs of value.” The function of money as a measure of value already contains the possibility of replacing real money with paper money. This is due to the fact that:

• the scale of prices is conditional and regulated by law;
• in the names of money the consequences of value relations are gradually smoothed out (in the process of circulation of money).

There are two types of paper money: government money, issued by the treasury (treasury notes) and banks (bank notes or banknotes). Treasury bills are usually called simply paper money, in contrast to banknotes, which by their nature are credit money. Historically, paper money arose earlier than credit money; banknotes appeared with the development of credit relations.

The first paper money appeared in China in the 12th century. n. e., in Europe and America - in the 17th-18th centuries. In Russia, paper money (assignats) was introduced in 1769.

Paper money are signs, representatives of full-fledged money. Circulating signs of value take the form of symbolic money, this is facilitated by the fleeting nature of their circulation, as well as the fact that their forced exchange rate is sanctioned by the state. Initially, the issue of paper money was limited to a quantity equal to the amount of gold required for circulation. They express the obligations of state power and have become an instrument of circulation, a method of state payments against debts, a means of payment aimed at generating income to replenish the state treasury. Their possible depreciation is associated not only with rising prices for goods and services, but also with a possible change in government power and undermining the population’s trust in the state. Paper money is not exchanged for precious metals and is not determined by the need for trade turnover. Their issue is mainly due to the need to finance government spending and the budget deficit. It is quite acceptable to over-issue paper money, which causes its depreciation.

Thus, money is used as a substitute for gold in fulfilling its main function - a medium of circulation, i.e. indirectly replacing gold, they are merely tokens of the value of all commodities in circulation. Paper money itself cannot serve as a commodity; at first it was freely exchanged for gold at par. Their two main functions are: a measure of value and a medium of exchange.

The main reasons for issuing paper money are:

• the needs of the state treasury for resources caused by the state budget deficit;
• the presence of historical periods characterized by the government’s urgent need for money (wars, revolutions);
• a chronic deficit in the country's balance of payments, when the government, trying to avoid the leakage of gold abroad, is forced to introduce money that is not redeemable for gold, provided with a forced exchange rate, in order to obtain emission income;
• physical wear and tear of coins, turning full-fledged coins into signs of value, and in some cases, deliberate damage to coins by the state, leading to a decrease in the metallic content of coins in order to generate additional income for the treasury.

Paper money issued by the Treasury is based on the redistributive function of the state, on its ability to exercise non-economic coercion. Paper money is not a government debt. At the same time, their release can be considered as a specific form of forced financial subsidy from society to the state.

Paper money- these are banknotes issued to cover the budget deficit and not intended for exchange for metal, but endowed by the state with a forced exchange rate. The real paper value of money is determined by the objective law of monetary circulation: its issue is limited to the amount that would reflect the actual circulation of the gold it symbolically represents. Paper money is mandatory banknotes that replace gold as a medium of circulation. They are characterized by instability of circulation and depreciation. They are not suitable for fulfilling the function of treasure.

Credit money is a form of money generated by the development of credit relations, the basis of the modern payment and settlement mechanism. They arise in the period when capital becomes an integral part of production itself, i.e. they appear not from circulation (the commodity is money), but from production itself, from the circulation. Credit money belongs to the highest sphere of the socio-economic process and is governed by laws other than ordinary money. The object of exchange relations is not the commodity in its essence, but commodity capital. The functions of money are not performed by a monetary commodity, but by monetary capital in the form of credit money.

The credit system gave rise to a special kind of credit money, which is banknotes of central banks that are not redeemable for gold and, on their basis, bank deposits (deposit money, which is the basis for check circulation). The bill and banknote arose on the basis of the circulation of debt obligations. K. Marx wrote: “Issuing bills is the transformation of goods into one of the forms of credit money, and discounting bills is only the transformation of this credit money into other money, namely banknotes.” Debt obligations with the maturity date for liquidating the balance of payments required cash; cash had to appear before the due date of payment on the bill, otherwise the production process could be disrupted and slowed down. Thus, credit money is subject to the law of monetary circulation and the laws of movement of loan capital. Their circulation is connected both with the action of the law of value and the law of surplus value.

There is a gradual evolution of money. Under the conditions of gold monetary circulation, the transition of a monetary value from one function to another occurred without changing its form: from a means of circulation to a means of payment and back. Qualitative and quantitative redistributions of gold as money are resolved through the appearance of signs of gold and signs of value, which represent new forms of money. Gradually, the role of money as a means of payment goes beyond the sphere of commodity circulation. Money becomes a universal commodity of contractual obligations.

Bill of exchange how the first type of credit money arose as a result of the sale of goods on credit. The bill of exchange is transformed into full-fledged money from the seller-creditor, giving the buyer-debtor the opportunity to pay not directly to him, but to the bank that issued the debt obligation in the form of a bill of exchange. A bill of exchange is a document drawn up in the form established by law and containing an unconditional abstract written promissory note, i.e. this is a security.

A bill can be:

• simple (solo bill) is a written promissory note of the debtor to pay within a specified period of time a certain amount of money to the owner of the bill;
• transfer (draft) is an order from the creditor to the debtor to pay a sum of money to a third party within a specified period.

Promissory note and bill of exchange are types of commercial bill, which can be of two types:

• commercial, arising on the basis of a trade transaction;
• a promissory note or bill of exchange that has no special collateral but is backed by undrawn bank lines of credit.

Other types of bills:

• treasury - short-term government securities (their sale is carried out at a discount to the nominal value);
• financial - long-term obligations regarding a certain amount of money lent;
• friendly - a bill that is not related to an actual commercial transaction; they are issued to each other by the parties to the transaction in order to receive money by discounting the bill in the bank;
• bronze - a long-term obligation that has no real security.

The features of the bill are:

• abstractness - the bill of exchange does not indicate the specific type of transaction;
• indisputability - obligatory payment of a debt;
• negotiability is the possibility of transferring a bill of exchange to other persons using an endorsement (endorsement), which creates the possibility of mutual offset of the bill of exchange obligation.

Bill circulation is characterized by elasticity, i.e. ability to automatically expand and contract:

• the growth of bill turnover is associated with the level of development of credit relations and the growth of trade turnover;
• a decrease in turnover with a reduction in the volume of credit circulation and the repayment period of bills.

In the sphere of monetary circulation, a bill of exchange has a limited scope, since it mainly serves wholesale trade, information about the solvency of the persons transferring the bill of exchange under endorsement is not always known, and a limited number of persons are involved in the circulation of bills. The discrepancy that arises on a large scale between the amount of circulating full-fledged money and the volume of trade turnover is compensated by the expansion of bill circulation. The value of the bill is determined by the value of the goods whose sales it serves.

The shortcomings of bill circulation gave rise to the appearance of banknotes. This is a bank note, a credit token of money issued by banks of issue and replacing metallic money in circulation. Banknotes are perpetual debt obligations. A banknote differs from both a bill and paper money.

The difference between a banknote and a bill:

• banknotes are issued not by industrial and trading companies, but by central banks;
• banknotes are perpetual debt obligations. Modern banknotes are never exchanged for metal, but have a commodity (credit) basis;
• They are universally tradable because they are issued by central banks whose solvency is beyond doubt.

Banknote is a debt obligation, a bank credit note, a type of paper money, issued by the central bank as a medium of exchange, a substitute for full-fledged money.

Since banknotes are issued in the order of lending, and loans are subject to repayment upon expiration, the banknotes are ultimately returned to the issuing bank. The issuance of banknotes in the order of lending and their regular return flow to the issuing bank - these are the laws of banknote circulation.

Banknotes can return to the issuing bank not only by repaying the loan. For a long time, banknotes were freely exchanged for metal coins.

The free exchange of banknotes for gold was of fundamental importance, since it eliminated the possibility of an excess amount of money and prevented its depreciation in relation to gold. In the 30s of the XX century. in all countries the free exchange of banknotes for gold was stopped and was never resumed.

The lack of free exchange for gold brings fiat banknotes closer to paper money. Banknotes issued in order to credit trade turnover are credit money. If the issue of banknotes is used to cover government expenses, then the banknotes actually turn from credit money into paper money.

Fiat notes may be issued in excess quantities and are subject to depreciation relative to gold.

Check is a document of the established form containing the unconditional order of the drawer to the credit institution to pay the holder of the check the amount specified in it, and can be used to receive money from the bank, as well as to pay for goods purchased or services received. Checks serve as a medium of exchange. Checks appeared in circulation in the 16th-17th centuries. simultaneously in England, where banks provided their depositors with special books with order forms used for settlements, which were the prototype of modern check books, and in Holland, where banks began to issue bearer receipts to their depositors. In conditions of developed commodity circulation, checks play an important role. If retail trade turnover is serviced mostly by cash, then wholesale turnover is accompanied by check circulation. Check turnover significantly exceeds cash turnover.

The economic nature of the check is that: that it serves as a means of obtaining cash from a bank, acts as a means of circulation and payment, and is an instrument of non-cash payments.

There are many types of checks:

• registered - checks issued to a specific person without the right to transfer to another person;
• order - checks issued to a specific person with the right of transfer by endorsement;
• bearer - checks that do not indicate a specific person;
• settlement - checks used in the non-cash payment system;
• accepted - the bank agrees to the payment.