After a hard-fought "fiscal cliff" deal that narrowly averted devastating tax increases and spending cuts, President Barack Obama and congressional Republicans face even bigger budget battles in the next two months. The fiscal cliff deal was approved late on Tuesday by the Republican-led House of Representatives and signed by Obama on Wednesday.
Much of the compromise agreement that the autopen of Obama signed into law was targeted at families and individuals. The agreement notably preserved most of the tax cuts that passed under President George W. Bush that were set to expire. This agreement came loaded with...
U.S. House Of Representatives Passes Fiscal Cliff...
04 January 2013
The concept of foreign exchange or forex in the context of world economy has evolved over a long period of time, let us read about the history of forex and the major events that reformed the world of forex to create and maintain complete awareness about forex history.
The Barter System
In ancient times, trade was based on the barter system at the community level and there was no need for a currency. Under this system, the value of goods was expressed in terms of other goods and these values were measured in different and the exchange was generally unilateral though it was multilateral at times. But since this system had some limitations, various alternatives were developed.
Before we read about these alternatives, let us read about limitations of the barter system.
1. In a barter economy, it is difficult to measure the value of all goods.
2. A barter transaction cannot occur if an individual wants to buy a specific amount of goods belonging to another individual. Since some products cannot be divided due to their intrinsic characteristics, the barter system failed to live up to expectations of the market and its constituents.
3. Some barter economies relied on non-durable and perishable goods that pose a difficulty in storing wealth over a period of time.
The Gold Standard System
Due to limitations of the barter system, a hunt for efficient alternative soon found its answer in gold, the yellow metal. The reasons why the metal became a success was because it was difficult to find new sources of gold, it could not be manufactured or printed, and it was not easily mined and since it was the most ductile and malleable of all metals, gold became the world's preferred choice for exchange. However, the fact that gold is not easy to transport due to its weight, world governments started printing bills or notes.
Bills and Notes
Though bills and notes weigh lighter than their previous counterparts, but governments made a mockery of them by printing more money to pay themselves and...