What if we ended this week in a fun and educational way, by doing a little easy riddle? Fun, right? Come on, I start: You can make me, exchange me, save me and spend me, who am I? ». YES, MONEY! It was easy. Come on, a little second “How is the money creation (fiduciary) going? ! You do not know ??? Omg, let us explain it all to you!!
How much does it cost to make a part?
It all depends on the part, since they have neither the same shape nor the same weight. A coin of 1 or 2 centimes costs about 3 centimes to manufacture: their design is more expensive than their value. On the other hand, €1 coins only cost around 15 cents to design.
And a ticket?
Depending on the denomination, the manufacturing price of a banknote would rise from 3 to 8 centimes. Regardless of its value, in France, we are therefore always very profitable.
Who makes the euros?
Euro banknotes and coins have been circulating since January 2002 in the countries of the “euro zone” (19 countries in 2023), but are not produced in the same place. First, you should know that each country has its place or places of design, and that it is the European Central Bank (ECB) which sets the number of denominations and coins that each country must produce, according to their needs. Since there are only eleven banknote printers, some states are forced to delegate this part. For us, the Banque de France is responsible for it.
As far as coins are concerned, these are the responsibility of the national authorities, even if the ECB approves the volume of coins. In France, the Monnaie de Paris has the manufacturing monopoly. It resells to the State, and at cost price, the parts designed.
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How can the profitability of these products be improved?
In order to take a little more advantage of coin design, the Monnaie de Paris, for example, sets up collection coins. They have a more or less high legal value on French territory and attract collectors. Gold coins worth 500 euros have already been put into circulation. In reality, they cost around 300 euros in materials. This allows the currency of Paris to have an attractive margin per coin sold.
Why not print to infinity to pay off debts/help the poorest?
In all of our dreams, this is how everything should be. In reality, it is simply impossible. If we printed banknotes and produced coins ad infinitum to distribute them greedily to the population, money would no longer have any legal value. In reality, it is not the amount of money that makes a person rich, but the amount relative to the volume of products and services available on the market. For everything to work, the quantity of money must be correlated with the production of the market.
Who decides on the visual of the currency?
As with many elements of fiduciary money creation (physical money), the ECB has the choice of design and designs, as far as the euro is concerned.
For coins, the “tails” side, indicating the value of the coin, is common to the whole euro area. The face side changes from country to country. This side is chosen from a whole list of proposals by a jury chaired by the Minister of Economy and Finance.
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By the way, why is there no face on European banknotes?
Across the Atlantic, dollar bills bear the effigy of the country’s great personalities. Across the Channel, there is the Queen, or the King. But in France, and throughout the euro zone, we just love old buildings and bridges. The only anthropomorphic presence: the very, very small representation of the goddess Europa, in a tiny corner to the right of the front. It was in 1995 that the decision to include abstract monuments was made by the Council of the European Monetary Institute, quite simply to prevent a portrait, however abstract, from being interpreted as a national preference, and not to create jealousy between the Member States of the euro zone.
Who invented money?
We are talking here about “money” in the sense we attribute to it today. Otherwise, “barter” goes back a very long way in history, to the first peoples of the Earth. We find traces of the first metal coins in Lydia (now Turkey), around the 7th century with Jesus Christ. It was in -687 that the king of Lydia, a man named “Gygès”, made the first metallic currency, relatively close to the one we still use today.
As for banknotes, the first paper money would have appeared in China in the 7th century, then officially adopted by the Chinese administration in 1024. In short, we have not invented much.
How much silver is made in France every year?
According to the website of the Bank of France, the country issued 184.3 billion euros, of which 40.8% in €20 notes and 57.8% in €50 notes. Will a multi-billionaire ever be able to make that much money? A question to add to the top of the questions we ask ourselves about billionaires!
What material are the tickets made of?
Well, good question! The composition of banknotes is one of the best kept secrets (so that everyone does not start designing counterfeit banknotes). We just know that it has evolved over time. In the Middle Ages, banknotes were made of cotton fibers, like the fibers in our clothes. Not today. We also know that polymer banknotes appeared in the 1980s in Australia, then in Canada or Mexico. What is special about this plastic component? It costs a blind (a peak, for money), but is particularly resistant. These tickets are supposed to last 3 times longer.
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