This is a vast concept, spread over centuries and over millions of people. I will only try to highlight the gist of it.
In medieval times, land itself was the most valuable commodity, and most wars were waged to gain more land.
But owning land made trading difficult, as it could not be transported at all or divided very easily.
With the discovery of gold, people fell in love with gold itself, for its beauty and scarcity.
Most towns and countries had their own gold coins.
This gave gold all the desired characteristics as a medium of trade:
Gold itself ended up being too heavy to carry around and too difficult to divide. So the concepts of printed money and coins were devised.
Each country had their own currency, directly linked to a specific ratio to the value of an ounce of gold.
This led to the capitalist system where the value of goods were determined by supply and demand. This capitalist system was responsible for most of the growth in the world from the 1950’s to today. There were some exceptions where goods had and inflexible demand, like cigarettes, alcohol, medicine, fuel, etc. where people would pay whatever was asked, just like drug addicts.
But – just like extreme communism – extreme capitalism proved to be detrimental to society, in that most people ended up being oppressed, marginalised and exploited.
When I was a 10 year old boy in the 1960s, in South Africa, my dad gave me a one pound note as payment for cleaning up the garden. On this one pound was printed: “This one pound is guaranteed by the Reserve Bank of South Africa by one ounce of gold.” I asked my dad if the bank would give me the one ounce of gold in exchange for the one pound note. He said “possibly, they should”.
In 1971 gold was abandoned as a standard of value for all currencies. Many good and bad reasons were given.
http://mentalfloss.com/article/12715/why-did-us-abandon-gold-standard
The basic idea was that, just as the value of shares of a specific company would go up and down depending on the perceived value of that company and its products, so the value of each country’s currency would go up or down depending on the country and its value, products and reputation.
Then inflation came along, and spoiled the game for a long time. Inflation is most beneficaial to the people who owe the most money. And the governments of the world owed the most money. And the governments were in charge of inflation. So they had the most to win from a high inflation rate.
But inflation can also wreak havoc. New Zealand was the first country in the world to realise this and decided to hold inflation at a rate of 3% annually.
This eventually caused New Zealand to be described as a “rock star economy.”
http://www.stuff.co.nz/business/72742382/Economist-who-branded-NZ-economy-rockstar-says-don-t-panic
The USA printed a similar one ounce gold guarantee on their dollar notes during the 1960s. This was later replaced by: “The government guarantees this one dollar note”, I am not sure how or what. This was eventually replaced by “In God we trust.”
See “The secrets of the one dollar note” here:
https://www.youtube.com/watch?v=pSFhcf6kLe0
This rampant printing of money caused the very rich people to return to GOLD and property.
The sub-prime mortgages in the USA is a good example of how the rich exploited the middle classes and the poor.
The rich bought property and sold it to anybody, even at no interest rate. This gave the rich many advantages:
Let me quickly add that I have nothing against rich people; most of them work hard and intelligently and deserve their riches, and are very humble people – think Bill Gates.
But for most rich people, money itself becomes boring after a certain point. After that, the only interesting thing in their lives are other people. The rich find ways to entertain themselves by exploiting people, often in cruel ways. Many movies were made on this theme.
George Soros himself proudly proclaims that he bankrupted the Bank of England. And when asked he stated matter-of-factly that “Yes, I am a God.”
http://www.investopedia.com/ask/answers/08/george-soros-bank-of-england.asp
http://patriotsandliberty.com/patriots-and-liberty/2010/09/09/who-exactly-is-i-am-god-george-soros
If you are thinking at this point that by merely taking the riches from the rich and giving it to the poor is a solution: it is not.
It will provide relief for a few weeks at most.
The problems are much deeper and more serious than that.
Today, I own one Zimbabwean 25Billian dollar note, which is worth about 40 US cents.
The underlying problem became apparent – currency was not linked to anything real or of intrinsic value.
The banks and governments seized this opportunity to regulate their country's fortunes by just printing more or less money itself. Or just by printing more money when they needed to buy land. Essentially they got all the land for free.