posted by Forex on Feb 13
When the barter was no longer an adequate of trading, money was invented, because the goods had quickly lost their value, and they could many times not easily be divided. On other 
side, the money have the function as a medium of market exchange, a unit of value in the stores. What is the money, this is something that had value in itself and usually is some kind of metal, like Gold and Silver, the both metals were valuable, because of its scarcity and its inherent usefulness.
The metal coins and paper money were in popular use by the 19th century, this was called “The Gold Standard”. Between all currencies there wasn’t direct value, each of them were exchanged for gold. And this wasn’t and effective exchange of two different currencies.
The central banks have almost the full control over the interest rates to borrow and lend the money. The banks found that they didn’t have patience to wait for gold flows to be restored. With the deficit of trading with gold supplies leaving the country, the central bank would make domestic savings more attractive, with rising the interest rates.
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