1590–1592 Inflation rate of 800 per cent! Towards the end of the reign of Johan III, the value of Swedish coins deteriorated both rapidly and substantially. The value of money declined disastrously as large amounts of copper were added to the silver in an attempt to produce more coins from the same amount of precious metal. Naturally, everyone wanted to be paid more of these paltry coins. This was why inflation rocketed.
1624 The first copper coins were minted. These were intrinsic value coins, which means that the coin had a value corresponding to the value of the copper it consisted of. This was the advent of the copper standard. Considerable efforts were made at that time to create a Swedish copper monopoly. When the price of copper began to fall, there were attempts to keep prices up by reducing exports and selling copper on the domestic market instead. The nobility were encouraged to put copper roofs on their mansions and Gustav II Adolf made the decision to begin manufacturing copper coins.
Today we only have credit coins, neither banknotes nor coins have any net worth corresponding to the value they represent.
1644 The Swedish Mint in Avesta begins to issue “plate money”. These were large, unwieldy copper plates. The largest weighed as much as 19.7 kg (!) and was worth ten daler silver coins. It would have been enough to buy a cow in those days. Copper was much cheaper than gold and silver, so to reach the same value it was necessary to make the copper coins much larger.
1661 Johan Palmstruch, the founder of Sweden’s first bank, Stockholms banco, implements his idea of facilitating the management of money by beginning to issue the first real banknotes, “credit notes”. These notes were interest-free IOUs in specific amounts that were meant to correspond to money deposited in the bank and strict regulations were introduced for their usage. The banknotes were a great success, but it all ended in a bank failure as Palmstruch issued too many notes in the form of unsecured loans. Palmstruch was removed from office and condemned to death, although he was reprieved.
1668 Sveriges Rikes Ständers Bank (the Bank of the Estates of the Realm), later to become Sveriges Riksbank, was founded and took over banking activities in Sweden. Originally, the bank had 20 employees, all men. Sveriges Rikes Ständers Bank was the first central bank in the world. Regional offices were opened at the end of the 17th century in Göteborg, Falun and Örebro.
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