The different currencies of countries from all over the world are considered fiat instruments. They don’t have backing aside from the trust of their nation issuing the legal tender. Previously, silver and gold are the ones that provide support for the overall foreign exchange Forex Trading. However, these metals soon prevented countries from creating vital changes when it comes to their money supply in case of drastic changes in the country’s economy.
Good for those countries with a considerably large number of natural resources as it can be their means of tax receipts and revenue. Those countries that can extract vital commodities from the innermost earth or simply grow crops that can be traded provides a continuous flow of revenue for exporting purposes.
Commodities are a very interesting topic to dig in. Here are some of the not so known facts about commodities.
Organization of the Petroleum Exporting Countries (OPEC)
According to the recent data, OPEC was able to generate 45% of the crude oil being used all over the world and 81% are fully recognized as crude oil reserves. The price of the oil can go up and down, depending on the supply and the laws of demand. As for the demand, it has been dependent on the economic performance of the world.
First Oil Production
The world has seen its first oil production in China in 327 AD. From then, bamboo pipelines are being utilized by the Chinese engineers to dig in 240 meters and extract oil from it. During those times, oil is being referred to as “burning water” and was mainly used to make salt and evaporate brine.
The First Known Futures Exchange in the World
The Egg and Butter Board is the world’s first futures exchange. It was established in 1848 which is a subordinate of the Chicago Produce Exchange.
Copper as the First Metal
The first-ever metal which was used by human beings dated at around 11,000 years ago was copper. The oldest one which was said to be used by humans goes back to 8700 BC. It was found in Northern Iraq.
Latin America As The Main Producer of Copper
Did you know that more than one-third of the copper production of the world came from the countries in Latin America? The United States Geological Survey states that Chile produces 5.5 million tonnes of copper. Next is Peru, China, and the United States.
Copper As A Crucial Metal for the Commodity Industry
Copper both act as heat and electricity conductor. It is also weather and corrosion-resistant. Because of this component, copper has been used to create pipes, electrical wires, machinery, and a lot of others.
China as the Leader in Gold Production
If Latin America leads the production of copper, China is the number one producer of another precious commodity – Gold. Following China are Australia, Russia, and the United States, all these countries produce these precious metals which are primarily used in the production of jewelry, and even as a trading instrument in Forex Trading. Other than that, Gold is used in mechanical and medical industries as they are good conductors of electricity.