Money turnover

Demand for money from the population is due to their important functions: they are a means of exchange and payment, a calculating unit, and also a means of preserving values. In economics, they are in a constant circuit, in an uninterrupted movement. Continuously changing and their owners. So, money turnover is a movement of money that mediates the turnover of services and goods. Without it, the movement of financial capital and the sale of goods is impossible .

Money turnover exists in the form of several systems. They have developed historically and are fixed by the legislation of each state.

Money turnover and its structure consist of four components:

• The monetary unit of the state, it expresses the cost of services and goods (dollar, hryvnia, euro, ruble, etc.);
• A system of paper money and credit, as well as bargaining chips, which are a legal means of paying for services and goods in cash;
• Special bodies in the state that regulate the money turnover in the country;
• The issuing system of money, that is, the procedure for issuing them in circulation, as stipulated by law.

The kind of money that goes into circulation also matters. Depending on this, money turnover can be of two types:

1. System of circulation of money of credit and paper. In this case, they can not be exchanged for gold, and it is squeezed out of circulation.
2. System of circulation of money of metal, when gold and (or) silver coins are in motion. They function as a full payment means. Also, at the same time, credit can be exchanged for metal or bullion.

Metal money has two systems of circulation, formed historically. This is monometallism and bimetallism. The latter is based on the use of gold and silver in the role of money. It is typical for many countries of Western Europe, since the 16th century. But at the end of the 19th century the conditions for the production of silver changed, which led to its depreciation. Sharply changed the relationship between its value and the value of gold, which was gradually being squeezed out of circulation. At the same time, there were so many silver coins that they stopped minting. As a result, only gold was used as money, for which it was freely possible to exchange money for credit and paper. Bimetallism was replaced by monometallism. It existed in three varieties:

1. Before the First World War, a gold coin standard operated, in which gold coins were circulating. They could easily be changed for paper and credit money.
2. Gold standard standard. It was introduced at the beginning of World War I by France and England. The standard ingot of gold had its price. It could be exchanged for money only after presenting the amount corresponding to this price.
3. Gold standard. It appeared in the 20s of the 20th century in other countries. The motto is a foreign currency, which can be exchanged for gold. The motto was allowed to change banknotes.

The era of monometallism ended with the crisis of the world economy in 1929-1933. Gradually began to form a system of credit money, which was not exchanged. It has the following features:

• The withdrawal of gold from circulation;
• Prevalence of credit money;
• Substantially expanded non-cash money turnover;
• The abolition of the gold content of banknotes, the refusal of their exchange for gold;
• Strengthening of the legislatively fixed order of release of money in a turn (issue) to give out credits to private businessmen ;
• State control of monetary circulation.

That is, in the modern world, the money turnover system looks like a system of money in credit, paper, which is not exchanged for gold, and coins. There is a gradual transition from commodity money to symbolic and credit.