Prior to the 17th century most money was commodity money, typically gold or silver.

A commodity money is a medium of exchange the units of which are fixed amounts of an actual commodity that has value other than as money alone.

The continued violation of the law of just weights and measures led to a new kind of money. This was the goldsmiths’ debt rather than silver or gold coin. This development required the acceptance in trade of the goldsmiths’ promissory notes, payable on demand. Acceptance in turn required a general belief that coin would be available; and a fractional reserve normally served this purpose. Acceptance also required that the holders of debt be able legally to enforce an unconditional right to payment; it required that the notes be negotiable instruments. The concept of negotiability took an act of Parliament in the early 18th century (1704) to overrule court decisions holding that the goldsmiths notes were not negotiable.

When ungodly rulers saw that they could take advantage of the new debt-money situation, they granted monopoly privileges to a single bank or a cartel of banks to print fiat money. Fiat money is money that derives its value from government regulation or law and is without any intrinsic value. The term derives from the Latin fiat, meaning “let it be done” or “it shall be,” as such money is established by government decree.

This newly created fiat money would be lent to the rulers, who would spend it first before the prices adjusted for the devaluation of the money. This practice, known as central banking was responsible for financing two of the five bloodiest wars in recorded history, and periods of hyperinflation in about 30 countries in the 20th century alone that confiscated and utterly destroyed the savings denominated in that currency and often led to bloody revolution.