Since the 17th century, most world powers started using paper currency as the dominant form of the financial transaction. As the world’s superpower, the United Kingdom was the first country to rule in favour of paper money as a practical form of trade as opposed to the gold. Other countries such as Germany and the United States followed in the 1870s.
Importance of Silver
Despite the demonetization of gold, experts often forget that silver always remained an important component of trades throughout human history. In fact, the old sterling silver was a standard of trade exchange for a long time. Theoretically, the only method for monetization of gold and silver is if the current financial setup fails to deliver. As a result, any drawback in the current capital structure is likely to increase the value of a metallic currency. In fact, current global recessions have forced experts to rethink monetization of gold and silver coins. If such a catastrophe occurs, silver definitely going to play an integral role in the global economy.
Unlike gold, silver is distributed more widely around the world. Due to its uses in industry and related economies, silver deposits are found in every household around the world. This is in stark contrast to gold, which has a very high price making it impractical for everyone to own. Furthermore, the largest economies including the United States have banned ownership of gold. In such circumstances, owning silver makes sense because governments would not be able to restrict the flow of silver investment due to its industrial application and a wide array of usage. Overall, experts and financial experts cannot discount the importance of silver as a major metallic currency because silver always remained people’s money ever since the coin was invented. In contrast, gold was used for larger transactions.