Brittle safe havens

Recent weeks' strengthening of the USD against the EUR, alongside the decrease of U.S. yields, has strengthened the dollar's status as the world's financial safe haven. While gold and other precious metals have always seemed to retain their value, the same had only applied to few selected currencies. Today we will review some of the process of consolidating monetary systems, and place the dollar's status in context. 

Currency is often defined as any physical mean that is used as a medium of exchange. Historically, many currencies existed only within a local scope, but the rise of global trade necessitated a medium of exchange that would be generally accepted and would be able to maintain its value. In the ancient world, precious metals were the obvious choice, mostly being conveniently minted to “standard” weights. These weights became synonymous with their value as currency. The ambiguity between the money and the commodity it was made of led to defining it as "commodity money". Two such examples of commodity money were the Chinese Tael and Greek Drachma. 

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