INFOGRAPHIC: The history of currency in 10 different countries
There are almost 200 fiat currencies today. Here is a quick snapshot of ten significant countries and their history with currency.
Even though there are short of 200 official fiat currencies today, throughout history there have been thousands of currencies that were once used for trade. The above infographic documents the history of currency in 10 different countries of significance.
There are some interesting lessons to be learned from this lengthy and often tumultuous history. For example, the Romans were really the first to debase their currency in a significant way, and many historians believe that this was a key factor in contributing to the downfall of the empire. Unfortunately, we have not learned from tragic events such as this (which helped cause the Dark Ages), and countless other currencies have also bit the dust since then.
One study of 775 fiat currencies found the average lifespan of a currency to be just 27 years. Here’s the breakdown:
- 20% currencies failed through hyperinflation
- 21% were destroyed through war
- 12% were destroyed through independence
- 24% were “monetarily reformed”
- 23% are still in circulation
It seems like a foregone conclusion that some of the currencies listed in the above infographic may not exist in 10 years, or perhaps they get “monetarily reformed”. In any case, it’s worth noting that in today’s interconnected world, it may be easier to stave off the death of one currency through global intervention. However, systematically there is far greater risk. If one currency fails, the possibility also exists for many others to share the same fate through the domino effect.
Investors should study currency history, and as part of a smart portfolio they should protect their hard earned wealth and savings in a defensive fashion. Black swans do happen, and even the crisis in the tiny country of Cyprus had people reeling. The potential for something much bigger is inevitably a possibility – it is just a matter of when and how.
Original graphic from: ZH
Currency graphic: Travelex.