All Episodes
Previous Next
March 10, 2006 - Freedomain Radio - Stefan Molyneux
31:29
134 Pens and Swords Part 1: Banksters

The heart and soul of State corruption

| Copy link to current segment

Time Text
Good morning, everybody.
It's Steph.
I hope you're doing well.
It is the 10th of March 2006, 8.33am, heading off to work.
And let's take a break from the darker side of life and have a chat about something technical, economic, and I think quite interesting.
This is the suggestion of a very bright listener who calls me or emails me to chastise me occasionally about some of my minor, and hopefully only minor, irrationalities.
Actually, one or two of the major ones as well, so thanks to him and to you.
Of course, for listening and for all the suggestions that come in about the rants, I really appreciate them.
So, this gentleman was discussing the issue of the gold standard.
Now, the gold standard is... it's not really that technical.
I mean, people sort of make it out to be very technical, and it's, to some degree, a little bit is.
But the basic question is really not so much one of gold standard as it is the constancy of money, which sounds dry and dull but is, you know, pretty important.
It's pretty central to a productive life and a free market and a decent society.
If you look at something like the inconstancy of money, and its effect on society, you can look at something like the fall of the Roman Empire.
It happened a lot to do with the wild hyperinflation.
If you have a look at, of course, the rise of Hitler followed hyperinflation within Germany, which wiped out the middle class, as I've mentioned about a dozen or so times before.
And inflation is a particularly insidious form of taxation.
What I'll do is I'll just talk briefly about inflation, and then we'll talk about the gold standard, and then we'll talk about money.
The idea that I'll do this in one drive.
Okay, it's the no tangent Friday.
It's gonna happen sooner or later.
Today might as well be the day.
Yeah, just in the bell curve of how many tangents?
I've already had all tangent Friday, so perhaps on the other side of the bell curve we'll have no tangent Friday.
It's certainly possible.
Okay, maybe not.
So, inflation is a pretty simple phenomenon with unbelievably horrible and complex effects.
Now the simple side of the phenomenon is just this man.
It is that the amount of money relative to the amount of goods and services in society is changing.
So the ratio is changing.
So if you imagine you have Two timber companies, each producing 5,000 trees and trading them, and they have these little chits, monopoly money that they use to represent each tree.
So if they have 10,000 trees and they have 10,000 chits, and let's just simplify it and say they trade one tree as a whole, then you're going to have one tree changing hands for one chit.
And everybody's going to be happy and it's going to be constant and so on.
Now, if they find some magic elf-growing formula which allows them to produce another 1,000 trees every year, so 500 each, then if they don't increase the amount of money that they're using, if they don't increase the number of chits, then obviously there's going to be some change in the value of money relative to goods, right?
So if you have 10,000 chits representing 10,000 trees, then every tree is going to trade for one chit.
If we say that they double their production, So you have 10,000 chits representing 10,000 trees to begin with, but suddenly the Magic Elf formula increases in potency, and you have 20,000 trees being produced.
Then each chit is going to have to represent two trees, right?
So before, where each chit could buy one tree, now each chit can buy two trees, because you have 20,000 trees and only 10,000 chits.
Whereas before it could only buy one tree, now it can buy two trees, right?
That's kind of it.
I mean, I wish it were more complicated than that, and I'm sure in economics journals it is, but that's sort of the basics of inflation.
Now, if you go the other way, then it's easy to see what effects the additional currency is going to have.
Let's say that you will continue to have 10,000 trees and 10,000 chits.
But then somebody just magically snaps their finger, runs off the printing press, maybe they're called the Mint, we don't know, and suddenly you have 20,000 chits and still only 10,000 trees.
So what's happened is the amount of money that's being used has doubled, but the number of goods that that money represents or is used to barter for is the same.
Well, all that's going to happen is Is that if you have 20,000 chits and 10,000 trees, all that's going to happen is that each tree is now going to cost two chits.
I mean, there's just no other way to do it, right?
That's what we call inflation.
So that's when the value of money goes down by half.
So that is sort of it in a nutshell.
And inflation is a 20th century phenomenon.
It is something that was never ever seen before, I mean except in very isolated weird circumstances, but it was never ever seen before throughout history to the degree with which it happened in the 20th century, simply because Throughout history, prior to the 20th century, there was a well-known and well-understood risk of what is called fiat money, or fiat currency, or paper money, or whatever.
And I'll get into that a little bit later.
But basically, the government took over the production of money.
So in the 19th century and before, but let's just talk about the 19th century, particularly in America, banks would print their own money.
So that'd be sort of the International Bank of Chicago, or the local bank of Philadelphia, would print its own currency.
And there were people who would exchange this currency and who had a pretty strong understanding of the value of that bank's currency.
Now, the value of that bank's currency was a complicated affair, but basically it had to do with the ratio between the numbers of dollars that the bank printed versus the number or the amount of assets that that bank had.
So let's just say we got a bank that has 10 million dollars in assets.
That's just a couple of investments, a bunch of mortgages, which if the people don't pay, they get the houses, some money, some cash on hand, and so on.
So it's got 10 million dollars worth of assets.
Now, a bank always faces the risk, as happened in the 19th century a number of times, bank always faces the risk that people are going to come and withdraw all their money, right?
I mean, if you give the bank $1,000, it doesn't put $1,000 in a special drawer with your name on it.
What it does is it takes that money and it goes out and lends like $9,500 or $9,800 of it, and then it pays you off the interest, right?
Because if it just stuck the money in the bank in a drawer, then it wouldn't be able to pay you any interest.
So banks always face the problem or the risk of what's called a run, a run.
A run on banks.
A banking run.
What happens there is that if a bank goes bankrupt then it can no longer give you back your money.
You might get back 5 cents on the dollar or 10 cents on the dollar or 20 cents on the dollar and usually that's only after the larger depositors have had their way through the law courts with the bank that's gone bankrupt.
So, you see these scenes in these old 1930s movies of bank managers, you know, everybody's lining up to take their money out of the bank because they know that after the first, like, 20 people in line, everyone's going to get the short end of the stick.
So people are jostling and fighting to get at their life savings.
Because the bank has been perceived to be risky, right?
So if somebody says, oh, did you know that bank so-and-so is really almost out of cash and they're not doing well at all, then the first thing you're going to want to do is to grab your money out of that bank before it goes into the great black economic void of bankruptcy and sucks all your money into it like a black hole, never to be seen again.
So, that's not what you want for your money.
And so, you want to make sure that you get that money out of the bank.
And what does that do?
Well, it absolutely ensures that the bank is going to go out of business, right?
So, it's possible.
And this is, of course, what bank managers are always trying to do.
Oh, don't worry, people.
Your money is safe.
We're fine.
It's just a vicious rumor.
You leave your money in the bank and everything's going to be hunky-dory.
And, of course, he may be saying this while all the other bank managers are carting the money out in wheelbarrows at the back door while he's reassuring people in the front door.
But some banks, of course, did go bankrupt.
It was pretty rare in the 19th century.
Once the government took over control of the money supply, it became much more rare.
And this is sort of an example, of course, as you always see, of violence breeding violence, right?
So once the government takes over the money supply, in other words, the government is now responsible for printing money, Then the government can do whatever it wants.
It can print as much money as it wants.
It can print as little money as it wants.
It can print money just for its own use, buy up a bunch of stuff, and then everyone else gets it in the shorts with inflation like 18 months later.
But basically you don't have a situation of a free market in money, which is where you desperately need it.
You need it desperately in education, and you need it desperately in money.
And we'll sort of mention why a little later.
But the government, once it began to print all this money, then banks could no longer predict the value of money in the future.
And they hadn't organized their lobby groups yet.
They didn't have their hands deep in the pockets of the government in terms of bribery and back and forth as they do now.
So naturally banks faced a lot of problems and a number of them went bankrupt.
And of course what that meant was because the average Joe on the street, he's sort of busy going to work and feeding his family and so on, He doesn't go, ah, the bank went bankrupt.
You know what that is?
That's because of the 1913 Currency Act, which put the federal government in control of the money supply, which caused instabilities in the capital markets, which caused my bank to be unable to predict the future value of money, and blah, blah, blah.
What he does is he goes, oh my God, this jerky bank just lost all my money.
I'm going to write to my little congressman and say, you better fix this, you son of a... whatever, right?
Again, this is violence breeding violence, and this is why you never want an organization within society capable of that kind of Control and violence because the effects are so subtle and all it does is increases the call for government regulation and this is of course what happened.
In the 1930s, late 1920s and 1930s, when banks went bankrupt, you had the government stepping in and taking over more and more banks, and so it just got to be violence breeds violence, coercion breeds coercion, until you get to totalitarianism collapse, or somehow the magic wand can be waved to restore society to a less violent situation.
Again, that's mostly theoretical, but if it's going to happen, it's going to happen because of conversations like this.
So, keep up the good work!
So, to go back to our timber tree example, this is really the state of the economy.
This is the big problem.
In the 19th century, prices actually fell by 50% because you had private organizations managing money, banks and so on, and you had massive increases in production.
So naturally, this is what you would expect.
Of course, there were some cycles, there were business cycles, there were problems.
Capitalism is not a smooth upward spiral to benevolent and perfect productivity.
Because those dang capitalists keep inventing new things.
So you have a horse and buggy, and everything's stable, and everybody working in the horse and buggy is doing great, and then some jerk goes off and invents the car, and then the horse and buggy industry goes into disarray, people are out of work, skills learned over 30 years become useless, and it's not pretty, it's not pleasant.
So, because capitalism keeps inventing new things that people want, that they prefer to the old things, there's a constant flux of skill sets within society which causes disruptions and upsets and people are angry and so on.
But there's nothing you can do about it, right?
It's just a result of free choice.
You have absolutely no... There's no reason why my skill sets in Visual Basic and COBOL should not ever fall out of favor.
Of course, they have, to a large degree.
So, for me, saying that I spent a year working in COBOL 74, which is the cobalt that was invented in 1974.
Why on earth should that be something that people will value from now until the end of my life?
There's no reason whatsoever, but people, they get entitled and they want their skill sets to be valuable and they don't like the creative destruction of capitalism where everybody's new choices destroy old and inefficient and unwanted industrial sectors.
I mean, imagine if somebody invents a teleporter how angry the truck drivers are going to be, right?
People can teleport goods around FedEx and the truck drivers are gonna be kind of cheesed, right?
You've just finished paying off your rig, and you're just about to start making a relatively good coin, and lo and behold, some pencil head ends up putting a teleporter together, and you're sort of SOL, right?
So...
That is something which is constantly happening.
So there was, in the 19th century, these kinds of disruptions.
There was, of course, the Civil War.
There was fiat money printed by the North and the South to fund the war, which destroyed the greenback, which was some of the government currency that went on at the time.
And there are corrupt people in banks.
I mean, there's lots of reasons, right, that things can go up and down.
But relative to the 20th century, these things were nothing.
These things were absolutely nothing.
As I mentioned before, for instance, after the First World War, there was an economic downturn that was far worse than what happened in 1929, but the economy recovered within a year to 18 months, simply because the government didn't help.
So to quote help.
And the government did help in 1929, which caused the depression to last for 10 years, and only end to a whatever degree you could call it ending, by people being taken out of the workforce and sent off to die.
So that did something to change the economy.
Or for England to be paying America to build bombs and guns and planes and so on.
And so this is what happens when the government helps.
Rather than the market self-correcting, you end up with this terrible situation which lasted for a decade and brought socialism really strongly into the Western economies and so on.
Again, violence breeds violence.
But to return to this issue of the gold standard, the gold standard is a methodology under which banks could easily allow people to review the number of assets they had within their portfolios, right?
So if you want to figure out how much bank assets are constantly changing as people apply for mortgages, as business applies for loans, and you bridge financing, and money comes in, money goes out, it's pretty Challenging, at least it was in the 19th and early 20th century, to figure out how much assets a bank really has.
Who knows?
So what people did to try and figure out whether the money that was printed or issued by banks or governments was actually any good, right?
Because it's just paper.
You can't do anything with it.
You can't eat it.
You can't even use it as notepaper.
It's completely worthless.
Coins and bills are completely worthless.
Whereas what they used to represent was gold, right?
So it used to be the case, and if you find some old currency, you can look up this phrase.
I know, I remember it from the English pound.
It used to be the case that you would put your money into a bank and a bank would store it in gold, right?
So gold coins would be what you would carry around.
And gold, of course, if your bank went bankrupt and you had, you know, 50 doubloons or whatever you'd call them, 50 gold sovereigns, 50 pieces of ATAR, If you had these coins on you and your bank went bankrupt, well, it wasn't that the money was worthless.
You would just turn it into jewelry or something, right?
So if you had gold coins or gold bullion or gold bars, and that's what you had as your cash, So, if the bank went bankrupt, you might lose a little bit, but so what?
It's still gold, it's still valuable, and people still want it.
You know, people, other than weird collectors, don't want money from the International Bank of Chicago from 1850, but if you find a gold doubloon issued by the International Bank of Chicago from 1850, it's still worth something.
So, it used to be that gold was the currency.
Now, the problem with gold, of course, is that people want to steal it.
And also, as it sort of shakes around in your pocket, it loses some of its value because it's rubbing around with other gold coins.
And there used to actually be people who would sort of turn inside out sacks of gold, carry it from place to place, take the gold dust, melt it down.
So the problem is called shavings or something like that.
The problem with gold is that it's going to get stolen.
You could lose it.
It's going to get shaved down a little bit here and there.
And silver also used to be the case, right?
So gold was like your hundred dollar bill and silver was like your dollar bill.
Because 10 to 1 or 20 to 1 was the very common ratio.
It was set by government fiat, right?
I mean, sometimes government would even interfere in the 19th century and say, you know, a dollar is worth this much gold and this much silver, and there was lots of arguments back and forth about how much it should be worth, because people who had a lot of silver wanted to set it at an amount that made them money, and people who had a lot of gold wanted to, and people who had dollars wanted to.
It was just a real political mess, but this was sort of the situation, that you had gold and silver as the primary currency.
And so if you wanted to know how much the bank actually had in terms of assets, you'd just say, okay, well, how much gold do you have?
Because if you had a dollar bill from the International Bank of Chicago in 1850, the idea was you could walk in and exchange it for dollars worth of gold.
I know that sounds weird now when gold is like hundreds of dollars an ounce, but back then it wasn't really so much the case.
You could get a little silver or gold-plated coin or something like that.
So that's what you were supposed to be able to do.
So a dollar bill was simply a way of transporting gold, sort of quote gold, from what was like the ATM card of the 19th century.
It was a way of transporting gold from one place to another without having to transport gold, which is heavy and bulky and awkward and subject to rubbing and Shaving and being stolen and so on.
So if I wanted to take 10 ingots of gold from Philadelphia to Chicago, rather than loading up my easy-to-rob stagecoach and provoking endless numbers of Westerns, then what I would do is simply get a promissory note which said, dude, you've got 10 ingots of gold on us, right?
Signed by the bank guy.
And then you would take it to the same bank or a bank where there was a recognized exchange of these kinds of promissory notes.
I would then go off to Philadelphia and I would then trade in that note for the 10 ingots of gold there.
And everybody would be happy, right, except for the highwayman who can't take my shit because it's sort of made out to me, right?
This sort of promissory note for gold is made out to me, and nobody else can do it, and maybe he can hijack me, and he can sort of say, okay, you go get the gold, and like the ATM robbery, right?
You go into the punch code and all, but it's risky, right?
People don't want that so much.
So that was the origins of currency, right?
That it was just a promissory note for gold that was held in a bank vault.
And it was originally used for transportation, and then people found that it was kind of easier, less bulky, and nicer to do this.
And then people wanted smaller denominations where it was too expensive to print, so they print coins which had longer duration because paper technology was more primitive.
So basically this was the origin of paper currency.
It was a direct representation of gold or silver held within a bank vault.
And that was one way of checking whether the bank had enough money or enough assets to cover its obligations.
The money it had out in circulation would be ten times like the assets that it would actually have, because everybody's not going to come and withdraw their money immediately.
Now, the bank is perfectly aware that if rumors go around around bank insolvency, everybody's going to try and cash in and the bank is going to collapse and people are going to sue and, you know, it's going to be a complete mess.
It's a complete disaster financially for banking families or people who are running the banks for there to be a run on the bank.
So, of course, they would take extraordinary measures or take great pains to publish their ratios of currency to assets to allow independent inspectors to come in and have a look at the vaults and count up the gold and They would have auditors and accountants swarming all over them to ensure that they were going to be solvent.
And this is, of course, exactly what you would expect.
So, you know, the free market took care of everybody and, you know, occasionally people got it in the shorts, but that's just the nature of the beast.
There's nothing you can do about it.
Anything you do about it in terms of regulations is just going to make things much worse.
So, for instance, if you remember in the eighties, if you're that old, in the eighties there was a savings and loan crisis.
And what happened was The government now guarantees that you will not get it in the shorts, up to like $60,000 in Canada or something like that.
It's the FDIC, Federal Deposit Insurance Corporation.
Corporation, like it's private, right?
And what it means is that if the bank goes under, the government's going to cover your account.
So that's wonderful, right?
Everybody's happy.
Especially the banks, who now longer don't have auditors swarming all over them, checking, because nobody cares anymore, right?
As soon as the government guarantees your deposit in your bank, then everybody shrugs and says, well great, okay, I don't have to care about it.
So nobody insists the banks get audited, nobody insists the banks stay solvent.
And so what happened was these restrictions were taking off savings and loans banks, and there was lots of complicated things going on.
But basically, because nobody was overseeing savings and loan banks, the government wasn't, right?
Of course, because what do they care?
It's not their money.
It's not their money that they pay, and it's not their money that they're covering, so they don't care at all.
It's just a bunch of bureaucrats moving paper around.
And the end users, the depositors, they didn't care either, because the government was going to cover their deposits.
So nobody cared.
So the SNLs went totally wild.
They went sort of financially postal.
They were investing like crazy, crazy deals, loans.
I mean, everybody.
The care, custody, and control of the resources of the bank was completely evaporated.
And you had $250 billion or more stolen from the taxpayers, right?
Because the taxpayers had to cover the cost.
It went into the national debt.
So it's all murky until our grandchildren end up with, like, they're living on rice cakes.
So that's another issue that occurs.
So when people talk about the gold standard, which most countries went off in the early to mid 20th century, so America and England I think was early 1930s, and they did it because they wanted to deficit finance, right?
They did it because they wanted to just print money and spend money and so on.
The way that the government prints money, they don't just sort of print it and sort of send off these water bombers full of cash to open up over cities and everybody goes, yay, and spends everything.
What the government does when it prints money is it just says, okay, this government bank account now has a billion dollars more and they go and spend that.
And nobody else knows because the ripple effect of the money through the economy is slow, right?
So the first people to spend that money do really well because inflation hasn't hit yet.
So everybody who goes and spends that money to begin with does really well, because they're spending all this made-up money, all this monopoly money, all this fiat made-up currency, they're spending it in a market that hasn't absorbed all of this new currency yet, and realize that the price of everything needs to go up.
So to go back to our forest example, if you have 10,000 trees being traded between two companies, and then one company gets hold of the magic printing press, and is able to print off another 10,000 chits of money, or tree representative currency, Then if it spends it carefully, the first couple of hundred or maybe thousand that it spends, it's going to spend before people realize that the amount of money floating around is much more than it used to be and adjust their prices accordingly.
So the first people to spend an increase in the money supply do really well.
And what happens is it's an income transfer between those who spend it early on and those who spend it later on.
So by the time the inflation has worked its way through the economy, which is sort of 12 to 18 to maybe 24 months, Those people at the end are paying far higher prices than those people at the beginning, and they're paying far higher prices than you would on average, right?
Because they have to also make up for the amount of predation that occurred at the very beginning.
So that's what I say, but it's a very insidious form of taxation.
And it tends to hit the poor more than the rich.
The rich have a lot more optional purchases, so they can choose not to buy things, whereas the poor don't, so they have to buy things, so they are absolutely subject to inflation.
The poor also don't have as many assets that are going up in value relative to the inflation money, that additional percent of inflation, because the poor just don't have that many assets.
They don't have a lot of trust funds, they don't have a lot of money in equity funds and derivatives and money markets and all that.
Because, of course, this has a strong effect on loans as well.
So, for instance, if inflation is 5%, right, which means that some percentage of money, it's hard to say exactly how much because it lags, some percent of money relative to the actual supply of goods and services in the economy, the money supply is going up.
Well, all it means is that inflation has to go up as well.
And it has to go up to cover all these people who got loans before the government started printing all this money, or putting all this money into its bank accounts.
So, the amount of inflation simply goes up when you have more money, and then the interest rates that you pay on loans simply goes up as well.
So, what does this all mean in terms of the gold standard?
Well, you know, my question is, and I think it's an interesting question, and this is part of the creativity that the free market will bring to bear.
My question is, I don't think the gold standard is going to mean anything.
And the reason that I don't think the gold standard is going to mean anything is because I don't think that banks are at all important in a free market.
I don't think the banks are even really going to exist.
And I'll tell you why.
Maybe I will sort of need to do this this afternoon as well.
But the reason that banks exist at the moment is because of inflation.
Imagine this way.
Imagine if you got paid in gold.
And you had an impregnable, secure, unbreakable, innable kind of vault in your basement, and nobody was ever going to steal your money.
You got paid in gold, you got to go home, and you got to put your money in your vault, and every day that you left it in there, it grew in value.
Because the prices of everything were coming down.
Just sort of picture that.
You get paid in gold, you take it home, you put it in your impregnable vault, and every day it goes up in value.
Are you going to go to a bank?
Really?
Are you going to go and take your money and put it in a bank?
It really wouldn't make any sense.
You don't have to worry about it getting stolen, and it's going to go up in value every day anyway.
Maybe not quite as much as if you put it in a bank, but so what?
Putting it in a bank is risky, right?
Because in a free market, your bank can go out of business, right?
If you're in that situation, to me it's a very interesting question.
What on earth would banks have to offer people who didn't have to worry about their money getting stolen, who could transport it without any effort whatsoever, and whose money was growing in value regardless of whether it was in a bank or not?
Well, what would a bank have to offer?
Well, nothing really.
Now, they would exist for people who want mortgages, people who didn't inherit homes, and there would be some lending agencies like DROs that would lend money based on credit rating and you'd pay them back.
But that's not really the same as a bank, right?
I mean, anybody can lend you money, but a bank to sort of deposit your money in and get interest and get nailed with service charges and so on, none of that really makes any sense at all in a free market.
It makes sense now because of inflation and regulation and so on.
But it doesn't really make any sense in a free market where, like now, right, where you have electronic transfers of funds, you have ATM cards, you have credit cards, you have all of these sorts of things which can be offered by just about anybody and, you know, which don't involve you taking all of your money and giving it to somebody else.
Inflation, and you know, it sort of struck me when I was thinking about this topic this morning and just by the by, I've talked about what herds money into the stock market and into lending institutions, the greatest one, of course, of all.
is inflation.
Because inflation means that if you stick your money under your mattress, if you hang on to it yourself, if you do put it in your vault in the basement, you take your dollar bills, inflation guarantees that that money is going to lose value over time.
And this is why people don't put money in their mattress or bury it in their backyard or hide it someplace safe.
Because it's losing value.
So it means because of government-run inflation, and inflation is entirely the result of government financing, government control of the fiat currency, because of inflation you have to put your money in a bank where at least you're going to get some interest and so on, and that's of course the bank then puts it in the stock market or lends it, and that's another reason why money gets herded into the stock market.
So, let's sort of understand that the gold standard, that people say, let's go back to the gold standard, what they're doing is saying, let's go back to 19th century methodologies for managing financing prior to the introduction of debit cards, credit cards, electronic transfers, ID cards, retina scans, thumbprints, whatever it is, however it is that you're going to secure your money, the gold standard would be to say, well, let's go back to that.
And I don't really see how that's going to be valuable at all.
I mean, maybe it is.
Maybe it is.
Maybe the 19th century methodology for dealing with the problem of currency, maybe that is the best methodology.
I'd be kind of surprised if it was, though.
Just because so much has changed, especially in the area of money and banking and currency.
I mean, good heavens, it's just unbelievable.
You can send, you know, ten factories worth of capital across the Pacific or the Atlantic within about a third of a second, which really wasn't the case in the 19th century.
The best you could do in the 19th century was to send the chit which said you owned ten ingots, so you could send it across in mail, which would also be risky as well, just in terms of it being received and not intercepted.
Whereas now you can, in a completely secure manner, you can send all the capital you want anywhere in the world at the click of a mouse button.
And I just don't see how the gold standard would really fit into that.
Now it could be, it could be, but it seems to me unlikely.
There would be a much less demand, much less of a demand for banking services if people had secure ways of storing their money, which could be just about anything.
There's about a bazillion ways that you can get people to have secure anti-fraud devices, which is their money.
I mean, you could get a chip implanted in your shoulder with your pin that was controlled by your brain, which could never be stolen, which you could never lose unless you lost your shoulder.
I mean, this is just sort of made-up things, but these are all things that could conceivably be the way to do it.
I mean, there could be something less intrusive, but then you might lose it, or it could be something that it doesn't matter if you lose it because it's only your You know, you have to hold it up to your eye for it to purchase or something like that.
I mean, there's just ways that you can hang on to all of your money without sticking it in a bank and without worrying about losing value in that money.
Because when the government is no longer in control of the money supply, the prices go down continually, right?
So you wouldn't be losing any money.
Your money would be gaining in value if you just sort of kept it in a vault in your basement.
So, you wouldn't need to stick it in a bank.
You wouldn't worry about inflation eating away at your money.
And so, that's what I see in the future, in the free market, in sort of matters of banking.
Is that going to be an enormous change in how people spend their time and money?
Of course!
But so what?
You know, I mean, it's always tough for me for people to say, oh, you know, but there's lots of change and people have trouble with change.
Well, look, you're talking to the wrong guy.
I work in the software industry, so my knowledge gets blown away every two to three years, and I have to completely reinvent myself as a professional.
So don't talk to me about... and demand goes up and down.
There was the boom of the 90s, the bust of the early 2000s.
Languages keep changing.
Operating systems come in and out of vogue.
Various database systems come and go.
methodologies.
You go from Windows to web and back again with smart clients.
There is a constant flux of the value proposition and the technology.
So, you know, you're certainly talking to the wrong guy if you're saying that people should be protected from change.
I mean, I kind of like it myself.
There are times when it's a bit of a drag, but for the most part, it's great.
So that's sort of my take on what the relationship is between money and the gold standard.
I'm I think the gold standard is an interesting thing to study or to learn about simply because it's important to understand how far apart it is from what we have now in terms of fiat money and fiat currency.
But I may pick up this topic this afternoon because there's a few other things that I want to talk about in relation to this area, which I think are interesting too, or at least are interesting for me.
And so I hope you're doing well.
I will give my normal slight pause as we exit for the iPod users or the iTunes users.
Actually, let me know if it's just iTunes or if the iPod itself actually cuts off as well.
▲
Export Selection