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on May 08, 2018

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Fresh Banknotes From Our Central Bank | Bob Klein of Medici Capital

A central bank is what issues the release of banknotes to the public. The U.S. Treasury, however, controls the actual printing of money, though it gets its orders from the Fed. The Federal Reserve also removes worn out, fake and outdated banknotes as time goes on. Through the Bureau of Engraving and Printing, the Treasury Department creates paper currency. Through its resources at the U.S. Mint, the Treasury stamps and designs its coins. What circulates banknotes into the U.S. economy is the act of lending. Central banks, within a typical economy, rely on commercial banks to request banknotes in the form of a loan. With interest rates, central banks can lend out their own currencies. Bank of America, Wells Fargo and Citigroup receive their working cash as a loan from our central bank. These commercial banks could lend their own money out, but using borrowed cash reduces their risks. The bill notes that commercial banks receive are then loaned out, with more interest applied,

The Surprising Origin of Financial Words | Bob Klein of Medici Capital

I t’s hard to imagine a modern society thriving without money, and, after all, our daily lives are driven by transactions of goods and services through commerce. Through the ages, money has evolved, taking various forms from shells to basic coins and now cryptocurrency. It’s no surprise that language, too, evolves through time. What may be surprising, though, are the origins of financial words . Some of these words have roots in things that have nothing to do with money, and yet over time, as we assign value and meaning to them, they enter our lexicon with financial implications. Capital Coming from the Latin word for “head,” caput , the first known usage of the word capital emerged in early Middle English when it was used as an adjective meaning “of or relating to the head.” Capital was originally used to describe things affecting the head, as in “a capital wound.” Head injuries can be serious or even fatal, and with this in mind, capital came to describe people or things that t

Tally Sticks | Bob Klein of Medici Capital

Credit cards are a fairly recent invention, but the concept of credit itself goes back in history. As a forerunner to today’s credit cards, medieval merchants actually developed an early version called a tally stick. With few literate people and currency regularly unavailable, the tally stick became increasingly popular in Europe. Tally sticks were a form of financial record keeping where notches were made on a wooden stick to indicate the amount of money lent and owed. Tally sticks were often made from willow branches harvested along the banks of the Thames and were about 8 inches long. The stick was split down the middle with the debtor retaining one half called the “foil.” The creditor would keep the other half, called the “stock,” and even to this day, British bankers use the word “stocks” to refer to debts of the British government. The natural characteristics of wood lent the tally sticks a unique quality: because of the distinctive grain, the two halves could only match each o

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