Can someone please explain how the worlds monetary system works?
603150
We have different currencies because countries wish to maintain control of their own finances. The state of the  national currency is an important part of a nation's sovereign power.\n\nHow it works is really simple in principle. Currency is just another commodity for which people have varying needs and for which they are willing to pay varying amounts. Absent currency controls the value of a dollar, euro, yen or whatever is determined by what amount of other currencies people are willing to pay for them.
452917
Its pure supply and demand... or at least in principle. If all countries had an open economy, where their currencies where in a floating rate, instead of a fixed rate, supply and demand for that currency would determine its price. Lets say, mexican peso vs dollar. If today the exchange rate is $11.09 pesos for dollar and in the course of the day, international investors come and inyect more dollars to the mexican economy (stock market, funds, etc.), and that is greater than the amount of dollars that go out of the country, then people are demanding more pesos than dollars in that specific day. To put your money on mexican market, you have to do it in pesos, so what happens to your dollars? They are transformed to pesos... making the demand for peso higher than that for dollar. Exchange rate should go down... say $11.01. What determines this? Many factors. The stock market in Mexico has been booming for 2 years, so in 2005, the peso aprreciated against the dollar by almost 7%. But with the Feds moving intreset rates up, money is going to the US since it is less risky and the rates are going up, while in México rates are going down. So this year, dollar has gained value against the peso. \nSystematic error determines where the money goes, and who ever gets more of it would have its currency in better value.
1136595
It's backed by a promise of reimbursement by governments so people feel comfortable exchanging it for goods and services.  By providing an easily agreed upon, exchangeable, and accessable means of exchange it facilitates all manner of transactions.\n\nBe more specific on "Why it works the way it works."  There's a lot of ways in which it works and even more whys.
187458
Currency values between countries aren't controlled by any specific agency or anything, they're resultant of the economic factors in the various countries. A country can't just one day say 'hey, our currency's worth 10 times more than it was yesterday!' - it's a measure of how much money will by in the given countries versus production costs, etc. etc. - it isn't a controlled value.
67117
The amount of money is constantly fluctuating.\n\nEach country regulates its own currency.  If you print too much, the value of your currency will decrease.  The value of the money is based on the country's productivity.  The USA has the biggest GNP at $11.75 trillion.  A country's currency will go up or down in value based on the actions in that country.  If it prints more money, its value will drop in comparison to other countries that are not printing out more money.
873488
Article I of the US Constitution gives Congress the power "To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures."\n\nThey oversee the treasury and decide how much money to print with the assistance of the US Treasury Department.  This is done based upon economic forecasts, the value of the dollar verses other currencies and the need for the money.  They may want to print more money to create inflation (which lowers unemployment) or limit the money to create savings.\n\nThey also print money to compensate for the money that is being constantly taken out of circulation (you trade in a ripped dollar at a bank and they destroy it and print a new one to replace it).\n\nThe Federal Bank handle fiscal policy (such as interest rates and borrowing guidelines), not monetary policy (how much to actually spend).
968510
normal way deflation is irrelevant, calculate it in us dollars, if your comparing countries you a common currency, dont use a deflating one\n\n..........\n\nand even if you calculated it in deflating dollars as long as the number was higher than number three it is still ahead and number 2\n\nor alternatively if you were measuring it in deflating dollars as long as the increase in deflated dollars was still ahead of number 3 it would be number 2
1002836
We have been doing this since we de-coupled the dollar from gold in 1971.  Actually, to be accurate, the private bank called the Federal Reserve has been doing this.  When they set interest rates low, more dollars are borrowed, meaning more dollars are needed to be put in the system, so they order it up from the Treasury and print away.\n\nIf you compare the price of precious metals and real estate, two items that have fixed "value" unless something big and artificial happens to them, then you will notice that they have increased in value almost 1.5x since Bush took office.  We have had inflation of nearly 50% in the last 4-5 years.  The Fed stopped making public knowledge the M3 indicator two months ago, which is the number of dollars in circulation in the world.  This was another trick to curb inflation...if nobody knows how many dollars there are, they can't adjust the rate of exchange based on any hard number anymore.
705943
its a payment that U set up for an amount to come out at a certian point.  I have a standing order set up for money to come out of my account each month and go into a joint account.  If you call you bank they will be able to explain in more detail.
504574
Chinese don't have a fully floating currency.  They "float" their RMB to a selective basket of goods/currencies.  This means the exchange rate only changes a minimal amount per day.
690343
Because it controls monetary policy and supply of currency in our country.  It is an integral part of our democracy and it would be a really bad idea to get rid of it.  And as far as I know, there has been no discussion about getting rid of it anyway...
365062
Major currencies prices are decided by supply and demand factors..like the dollar, euro, etc..these are free float currency..\n\nsometimes currencies are regulated by the respective governments..like the yuan..\n\nOtherwise interest rates and inflation also have a bearing on the currency prices
316061
The US dollar is backed by the US Government, (not great but it works). The US government, thankfully, is back by its taxing power over the American people (which is VERY good). I don't think you'll have much to worry about. But I won't keep cash laying around not collect interest or working for you. Inflation is what will really eat away your money.
225406
Basically the confidence people have in the currency and the stability and essential soundness of the country.  Money is of no inherent value by itself - it simply represents value.  The value is a judgment.  Money is a convenience for trade - without it all would be barter.
283098
The currency is the euro. See the link for the rates if you are interesting
1077470
From Wikipedia (there is much more at the link I provided):\n\n"A market based exchange rate will change whenever the values of either of the two component currencies change. A currency will tend to become more valuable whenever demand for it is greater than the available supply. It will become less valuable whenever demand is less than available supply (this does not mean people no longer want money, it just means they prefer holding their wealth in some other form, possibly another currency)."\n\n"Increased demand for a currency is due to either an increased transaction demand for money, or an increased speculative demand for money."\n\n"A currency will tend to lose value, relative to other currencies, if the country's level of inflation is relatively higher, if the country's level of output is expected to decline, or if a country is troubled by political uncertainty."
800038
read this it will help u \n\nDefinitions of money on the Web:\n\n    * the most common medium of exchange; functions as legal tender; "we tried to collect the money he owed us"\n    * wealth reckoned in terms of money; "all his money is in real estate"\n    * the official currency issued by a government or national bank; "he changed his money into francs"\n      wordnet.princeton.edu/perl/webwn\n\n    * Money is any marketable good or token used by a society as a store of value, a medium of exchange, or a unit of account. Money objects can meet some or all of these needs. Since the needs arise naturally, societies organically create a money object when none exists. In other cases, a central authority creates a money object; this is more frequently the case in modern societies with paper money.\n      en.wikipedia.org/wiki/Money\n\n    * Money is the 5th song on Pink Floyd's famous album The Dark Side of the Moon, and was written by Roger Waters. It is the only song on the album to hit #1 in the United States charts.\n      en.wikipedia.org/wiki/Money_(song)\n\n    * KMFDM's sixth album, Money, was released in 1992. Originally the album was supposed to be called Apart, as Sascha Konietzko and En Esch would break up during the tour with Thrill Kill Kult in 1990. With the budget split in half, Sascha and En Esch made five songs each for the album. However, En Esch's half was rejected by Wax Trax! records. The record company gave them more money and Sascha finished the album by including new remixes of previously released material.\n      en.wikipedia.org/wiki/Money_(album)\n\n    * Money is a KMFDM single, which preceded their fifth album, Money, in 1992.\n      en.wikipedia.org/wiki/Money_(single)\n\n    * Money is a Time Warner financial magazine.\n      en.wikipedia.org/wiki/Money_(magazine)\n\n    * "Money (That's What I Want)" is a 1959 hit single by Barrett Strong for the Tamla label, distributed by Anna Records. The song was written by Tamla founder Berry Gordy and Janie Bradford, and would become the first hit record for Gordy's label, soon to be renamed Motown.\n      en.wikipedia.org/wiki/Money_(That's_What_I_Want)\n\n    * The official currency of the Republic of Croatia is the Kuna, which has 100 Lipa. Foreign currency may be exchanged in banks, exchange offices and post offices in accordance with the valid exchange rate. All major credit cards (American Express, Diners, Visa, Eurocard/Mastercard) and Eurocheques (after being changed in banks) are accepted. ...\n      www.artmedias.hr/losinj-cres-en/republic-croatia-losinj-cres-terms-arrival.asp\n\n    * coins and paper currency issued by a government for payment of debts and for purchase of goods and services.\n      library.thinkquest.org/J003358F/terms.html\n\n    * A means of payment or a measure of value.\n      www.vpsource.com/glossary.html\n\n    * This is the equivalent of all the goods and services of a collective. Instrument of capitalisation and mobilisation of value and as instrument of release of debts and obligations.\n      www.gruposantander.com/pagina/indice/0,,651_3_2,00.html\n\n    * No money was exchanged in the doll games. Dolls scavenged, stole, and crafted their own goods in the subsistence economies of pirate ship, outlaw den, desert island and orphanage. The coins discovered in one of many faux-leather purses dating from the late decadent period have, however, led to some speculation that Doll Games’ growing interest in realism and material goods might eventually have led to a monetary system, had the games continued long enough.\n      ineradicablestain.com/dollgames/glossary.html\n\n    * Anything that serves as a generally accepted medium of exchange, a standard of value and a means to save or store purchasing power. In the United States, currency (the bulk of which is Federal Reserve notes), coin and funds in checking and similar accounts at depository institutions are exam