The U.S. economy ceased to function this week after unexpected existential remarks by Federal Reserve chairman Ben Bernanke shocked Americans into realizing that money is, in fact, just a meaningless and intangible social construct….
“It’s just an illusion,” a wide-eyed Bernanke added as he removed bills from his wallet and slowly spread them out before him. “Just look at it: Meaningless pieces of paper with numbers printed on them. Worthless.”
According to witnesses, Finance Committee members sat in thunderstruck silence for several moments until Sen. Orrin Hatch (R-UT) finally shouted out, “Oh my God, he’s right. It’s all a mirage. All of it””the money, our whole economy””it’s all a lie!”
“Just look at it: Meaningless pieces of paper with numbers printed on them. Worthless.”
This is satire??? I have believed this for years.
When economists listen to Richard Dawkins and Christopher Hitchens. . . .
Well, I was trying to explain this to my son just the other night. “You see, for thousands of years, people made coins out of various metals that had some value — gold, silver, bronze. If a coin was stamped with something — like Caesar’s head — you knew it was officially made to a certain size and weight so you knew exactly what it was worth. Now we have these pieces of paper and they’re worth something because….ah….because…well, because the government says they are. :)”
Ad Orientem (#1), that’s been my position for years as well. It was all downhill after we got off the gold standard – and that followed fairly closely on the heels of the direct election of US senators. (Alright, so I’m a bit of a crackpot curmudgeon.)
It is also true, of course, that we mutually agree that precious metals are worth something, but there is something more intrinsically valuable in them – beauty, difficulty of extracting them from the ground even if plentiful, the ability to work them into desirable ornaments – than in treasury notes, bank bills and otherwise worthless metal alloy coins.
My teen-aged daughters have become interested in Star Trek (the original series), which we’ve been watching along with the movies that featured the original crew members (I’m reliving my childhood and adolescence with them, including that throat-tightening scene when Kirk et al watch the Enterprise burn up in the atmosphere of the Genesis Planet). A couple of nights ago we watched “The Journey Home”, when the crew, having recovered Spock, return to Earth only to have to timewarp to late 20th century San Francisco to take a couple of humpback whales back to the 23rd century (a forced plot if ever there were one, but it’s all in good fun). When the Enterprise folk realize that late 20th century earthlings are still using money, and that they themselves don’t have any, one daughter asked, “What do they use?” When my wife and I answered, “Credits”, I thought for a moment and then added, “But then again, so do we. We just associate pieces of paper and worthless metal with them.”
Money is dust, and to dust it shall return.
#3, #4, isn’t the value assigned to so-called “precious metals” equally symbolic? I mean, except for use in dental procedures and for ornamental use, what has gold got going for it? Why is a coin with the emperor’s image on it of any more intrinsic value than a piece of paper with Benjamin Franklin’s? Don’t both depend entirely on an arbitrary consensus of trust?
Bruce Robison
#6 Gold is quite useful in electronics as well. Here is an interesting though experiement. If there were a 1 oz. gold coin sitting on a table next to a stack of paper Federal Reserve Notes with a printed value equivalent to the current spot market value of gold…and you were offered your choice of either to take and keep, which would you take?
I know that I would take the gold, hands down.
If one were to have a time machine capable of going back in time to any time in recorded human history and you went back in time 100+ years to any time period and asked if gold was money…what would the answer be?
spoo!!! Wretched typo….”thought experiment” not “though experiment”.
Gold is the “noble metal.” It does not tarnish. It is both beautiful and rare. The Egyptians couldn’t get enough of it — and they weren’t just using for for money. They wore it, decorated themselves with it, made beautiful jewelry and other objects with it, and built their tombs with it. I mean…just because you’re dead doesn’t mean you don’t still enjoy being surrounded by beautiful things. 🙂
Sheeesh…..somebody finally woke up and admitted it?
Bruce, you will note that I wrote:
[blockquote]It is also true, of course, that we mutually agree that precious metals are worth something, but there is something more intrinsically valuable in them – beauty, difficulty of extracting them from the ground even if plentiful, the ability to work them into desirable ornaments – than in treasury notes, bank bills and otherwise worthless metal alloy coins.[/blockquote]
My meaning in the first sentence would have been clearer had I written, “that we mutually [i]assign[/i] value to precious metals”. However, as I wrote in the rest of that sentence, there is something to precious metals that grants them a value more real than that of treasury bills and bank notes (unless you consider the aesthetic to have no real value, but only illusory and mutually assigned value – which I’m not sure is a Christian position). That real value is not only aesthetic, but is also in part based on the physicochemical properties of gold, including the fact that it conducts energy (including heat and electricity) quite well. Of course, the malleableness of gold and its fairly universally desirable appearance also arise from those physicochemical properties, something that cannot be said about the usual forms of currency and coinage – because it isn’t the physicochemical properties of paper or of metal alloys that determine their worth, but rather trust in the issuing government or bank.
Clarification:
[blockquote]because it isn’t the physicochemical properties of paper or of metal alloys that determine their worth[/blockquote];
“their worth”, meaning the worth of currency and (non-precious metal) coinage.
More thoughts to ponder…
In Scripture, God, through the prophet, describes the streets of the New Jerusalem as being paved with gold. He also described the province of Havilah in Eden as having gold that was “good”. From the start to the finish of the Scriptures, gold plays a role. I don’t think there is one mention of a paper fiat currency anywhere at all.
The Lord makes constant comparisons and analogies using gold all throughout Scripture. It figured prominently in the decorations of the Tabernacle and later of the Temple. It was used in the ornaments and fixtures and even in the mortar between the bricks.
Think how many times silver is also mentioned in Scripture.
So, it appears that God made silver and gold to have value among men, does it not? Perhaps they do have some intrinsic value beyond the mere shared perception. Again, if someone offered me a choice between getting paid in paper or getting paid in gold, I would take the gold. They can (and have) printed more and more paper, but they don’t make much more gold and silver. A silver $1 coin sells for around $15 today. A $5 gold coin sells for about $100 today. The paper currency has been inflated so much that it isn’t even close to what it used to be worth.
A $100 dollar bill in the 1980 had the same buying power as $260.36 in 2009.
The US came completely off the gold standard in 1971. Any idea how much purchasing power $100 in 1971 had compared to $100 in 2009? You would need $529.72 today to have the same purchasing power as $100 did when we came off the gold standard.
In other words, a dollar today has about 19 cents of the purchasing power of a dollar from the days of the gold standard. By the way…do the income tax tables reflect that loss of purchasing power in the percent you pay on that dollar? Where did that value go? Who gets rich when the dollars are inflated so that they are only worth 19 cents? Could it be that government is stealing the purchasing power of people through inflation of fiat currency?
I can’t even begin to think what the new multi-Trillion dollar debt and “infusion of liquidity” is going to do to the purchasing power of a dollar in 2010…can you?
Check out this U.S. Bureau of Labor Statistics Inflation calculator:
http://data.bls.gov/cgi-bin/cpicalc.pl
Have fun seeing how the value of fiat paper currency has dwindled.
From this source of humour and parody flows the sad, ruthless truth.