Money, Money, Money

Money, Money, Money

I’ve got a $20 bill here, I can buy stuff! But, wait. This is just a piece of paper. Who says anyone will trust that this is worth $20? Money is only useful if at least two people agree that it can be trusted. A new documentary asks, what makes money trustworthy? It has to be reliable, like a clock, says Steve Forbes. It has to be fixed in value. Sixty minutes in an hour; sixty seconds in a minute. Imagine if that floated each day, that would make life chaotic. So throughout history, people needed a way to assign a fixed value to money. The best mechanism for this would be some kind of commodity that’s permanent, easily transported, easily understood by everyone. And that medium was, of course, gold. Not “of course,” people have pegged money to agricultural crops, or salt, that’s where we got the word “salary,” but gold was more reliable. And once it was accepted as currency Money begins to create a kind of mobility in people’s lives that they never had before. But gold is heavy! It’s hard to carry around. That limited trade. So people invented banks. The Knights Templar developed a system where they said, well, you can just deposit your money here with us and then, when you need some, you can withdraw it from your account. This enabled the peasants to travel Europe without being a danger of being robbed. That enabled much more trade. You could sell a bond in London, and build a railroad in India. And, as a result, this seemingly resource poor speck of Europe became the financial center of the world. Then, in the US Alexander Hamilton fixed the dollar to gold. The dollar became to be seen as a rock solid currency where you could go anywhere in the world and they would accept that dollar. and the world boomed. Wages soared. It was an incredible period of wealth creation. Don’t get me wrong, there were examples of terrible deprivation and hunger. But it was a time of great material progress. And the monetary foundation of that progress lay in the Gold Standard. But as usual, rulers would debase the currency, The Emperor Nero They would call in all the coins, melt them down, reissue them, of course, with his picture on them. But with less gold Rome’s decline was very closely associated with the decline of its money. When you change the value of money, you’re stealing property That happened to Germany after WWI To print money to pay for the conflict, Europe and the U.S. went off gold. And after losing the war, Germany suffered the infamous Weimar hyperinflation. We said to Germany, “You have to pay back the world.” The nation’s government certainly couldn’t pay that much money. So, Germany began to print and printed too much. You go to a restaurant and you find that your meal is going to cost eight thousand marks, say, and you order it, you eat it, and by the time the bill comes, that eight thousand Marks becomes sixteen thousand Marks. In the United States, around that time, politicians created our own crisis. President Herbert Hoover signed into law the Smoot Hawley Tariff. Its sweeping taxes on thousands of foreign products triggered a global trade war. This set in motion events leading to the Great Depression. With millions unemployed, governments searched for solutions. They tightened the money and the country literally ran out of money. So, in some towns, there was no money left. The bank closed. I am going to establish a government market for gold. Franklin Roosevelt, in an attempt to revive a struggling US economy, confiscated private holdings of gold and devalued the dollar. So, all kinds of constitutional freedoms and this moral commitment to maintain the value of the money were swept out Roosevelt really didn’t know what to do. so he kind of tried every theory, the way people will do, like a cook in a kitchen, trying different spices. Near the end of World War II, Western governments met to try to stabilize currencies. The world returned to gold-based money. And it was enormously successful. Those two decades, from 1950 to 1960, were the most successful economically of any time. But then, again, a President abandoned the Gold Standard. I directed Secretary Connelly to suspend temporarily the convertibility of the dollar. The value of the dollar plunged. Since then the dollar lost more than 80% of its value. That’s one reason that today Some believe the future lies in cryptocurrencies like Bitcoin. Bitcoin is both a currency and a payment system, so it’s like PayPal and U.S. dollars combined into one. But so far, crypto-currencies’s price changes make them hard to use as currency. Can we transact with Bitcoin today? Oh, I’ll pay you twenty Bitcoin if you come to work for me. That will be your annual salary. Was it the Bitcoin that was worth 980 at the beginning of 2017? Or, the Bitcoin that was worth 22,000 when 2018 began? So what does the future hold? Here’s the documentary’s concluding argument: The only way to restore trust is for the United States to return to the system that worked for most of its history. Gold has proven to be the preferred monetary standard. These days, most economists oppose a gold standard. Milton Friedman opposed it. But this documentary will give you background to help you decide what you think. After all, we do need sound money with a stable value. All this is the struggle for trust. And money, ultimately, does depend on trust. You can see the full documentary on some PBS stations, or stream it at:

100 thoughts on “Money, Money, Money

  1. Meanwhile, in the background Karatbars is is setting up the Gold Standard Crypto Financial System fully backed by gold.

  2. The U.S could, in theory, go back to the gold standard only because the U.S owns the most gold. Which is one of the reasons the U.S dollar is the only curency accepted, & in fact desired, world wide. China & Russia produce much more gold than the U.S, but due to their poor economic structure, can't hold on to it.

  3. When is the deadline for someone to run for President for 2020? Say when is the last minute someone could come out of the woodwork and run for office of President?

  4. “This planet has – or rather had – a problem, which was this: most of the people living on it were unhappy for pretty much of the time. Many solutions were suggested for this problem, but most of these were largely concerned with the movement of small green pieces of paper, which was odd because on the whole it wasn't the small green pieces of paper that were unhappy.” Douglas Adams

  5. Name me a currency and or time in history that has been as stable, globally, as the US Dollar has been for the last 50 years ! ! ! Why does the world's leaders…Putin, Xi, etc. invest their country's economy so much in the US Dollar – maybe because its the most stable currency on the planet ! Fuck with the US Dollar and the whole world's economy collapses.

  6. I think the only reason that people still believe in the US dollar is because it looks like the old gold based dollar and they don’t think about it

  7. Stossel is going to take the incredulous neophyte jag all the way to the grave. Give me a break, nobody is that stupid.

  8. I usually agree with Stossel, but in my opinion gold standard does not work simply because the modern economy is growing faster than the gold supply witch would cause deflation. Deflation in turn would reduce transactions since products would be cheaper tomorrow than today which would slow the whole economy down leading to a depression.

  9. Until we as a people say enough is enough and storm the White House as one nation and drag those greedy sons of bitches into the street and hang them, NOTHING will change. I pray I live long enough to see every last one of them laying in the streets. They screw you, your loved ones, your children, our future, every second of every day.

  10. Then there must be a non fluctuating value and no inflation. The last country to institute that went from bankrupt to world super power in less than 4 years and the world destroyed it because the jewish central banking system was eliminated in that country ……Hmmm go figure ??

  11. SILVER !!!!! You get back way more with silver than gold !!!! Check the gold and silver chart ratio in every recession !!!!!!! BITCOIN BIGGEST SCAM CREATED BY BANKS !!!!!!!!

  12. money is only acceptable by FORCE..because its NOT MONEY……there is no more trust, in god, well there 3-6000 different gods which one do we put our trust in.?

  13. Hell all precious metals. An Aluminum nickel, a nickel dime, nickle quarters, silver dollar, hell a gold $100 coin would be cool. People could start carrying satchels again.

  14. My first employer taught me how to invest and use my earnings to make more money, I earned $100,000,00's (I still do) He also had some profound advice, he would say "You're money is worth nothing until you spend it, so buy some shit that makes you happy, but you don't really need" ( I bought a Truck, and a Boat)

  15. Gold, or trade, like i give you this food for that plow.
    That never fails.

    I dig for gold, i like shiny things.

  16. Actually World was giving US dollar and taking gold back due to convertibility. That's why gold to dollar convertibility was stopped.

  17. Your money says on it "federal reserve", not gold or silver. It is only a promise that it is worth something, with no backup. But gold and silver are worthless too – you can't eat them. All economics is a house of cards.

  18. Why do you think islamic countries have more gold than anyone else ? Because it's real money ! That's why islam Controls the world

  19. The gold standard is great but there’s only so much gold in the World and because of that there are some problems with the gold standard for example many people collect gold whether they’re just rich and that’s what they like to do so they have a safe somewhere filled with gold or somebody has jewelry that is a family heirloom or they just like it and so they’ll keep it that way this combined with the amount of gold mind each year can affect the overall value of gold and therefore it is not a perfect Standard for currency One potential problem I can see is that a company start buying a lot of gold and turning it into jewelry and then goes out of business all of that gold jewelry would have to be sold at a lower rate not always but for the sake of this example because of the lowering value of gold some people may get worried and those same rich people who invest in gold may get cold feet and sell off their gold what I can because of this a substantial amount of gold could into the marketplace and evaluate to an extent I would be not fit for the use of basic currency on it is for this reason that I believe A government would try to maintain the level of gold out there in the market for the sake of their currency this of course would be controlling the free market which I am against as a libertarian and therefore I cannot see basing a currency on gold as a completely stable investment as A government I think personally the way the United States is basing their currency is value on supply and demand is a good way of going about it as long as during some war another country doesn’t find a way to devalue our currency with counterfeiting which is why changing to the gold standard only during war times is what I would think To be the best course of action

  20. Imagine if president Trump in the 2020 election campaigned on bringing our dollar back to the gold standard, he'd truly make America great again. We all know that demon-crats/socialists/communists would ever do this. Foolish people took us off the standard and failed us as leaders. Tricky Dick was a foolish man.

  21. Stossel is great, but the best documentary on banking and currency is called 'The Money Masters' by Bill Still. Cool thing is, you can watch it for free on YouTube

  22. Yeah no, I completely disagree with returning to the gold standard. If we did we did having a trade deficit with another nation would actually become a bad thing. Britain's economy during the 1800s was at risk of severe deflation (running out of money) because they had a huge trade deficit with China. The only thing this documentary proves is that the amount of money printed needs to be reduced rather than to pin it on some good that is in truth just as valueless as paper money. Seriously, why is gold inherently valuable outside some specialized uses in science? It's only valuable in our minds because it's pretty, and its value will go right out the window when a true crisis comes.

  23. Eliminate the Federal Reserve and return to the gold standard. America, and therefore it's people, will prosper once again and get back to being the world's financial leader.

  24. Money was invented by the market, which was invented by the village, which was invented by agriculture. It was an agreed-upon shiny bead that became useful when barter became untenable due to scale. Most people have no fucking idea what money is or what it was designed to do. Don't worry, though. Due to CDOs now exceeding the GDP of Earth by 16x, money doesn't exist anymore. Haha.

  25. I wouldn't say "money depends on trust" but that money upholds trust. Because of money we have a stable economy. No one can reconfigure the value of a dollar because it's universally agreed what a USD costs.

  26. We do need to keep a "Gold Standard" but just not using gold… Inflation is just the exchange rate between real shared value and a given currency… We need to start putting prices not in dollars or any currency, but rather in real shared value of goods and services… This would be like a gold standard, and include the gold standard, but only as a small part… It would also be a "cost of iPhones" or a "cost of getting an oil change" or a "cost of super cargo ship between two countries" standard… The Gold Standard always fails because economies always outgrow it's value… Running out of gold and silver causes things like The Opium Wars and the great depression… We need a standard that can grow past the value of ANY ONE item or even any group of items, and can grow to be the size of any full economy, or any possible future economy… We need a standard based of the global value of any good or any service… This would enable governments to print whatever amount of cash they want or seems reasonable to maintain, and it won't affect the real price of goods and services… This would also allow for a defacto global currency to come along… Money should be taken out of the hands of any government, and it's value set globally by the people… The dollar is the first currency to almost accomplish this, but for it to really progress to a global standard, we need to change our idea of what money is and going to be in the future…

  27. Such documentaries do not mention the fact that the Rich Jews, namely, Rothschild's Family. Rothschild created the paper currency based on fake gold reserves. See the Money Makers video. Jews have always been involved the theft of Gold from people. Gold coins is real money. Paper Notes are currency; hence, Currency Exchanges.

  28. They can't go back to the gold standard because then they'd actually have to " show us " the gold! And, we all know how that has turned out lately, right? 😂

  29. I used to admire Milton Friedman, but stopped doing so after learning how much of a statist he was. He despised the gold standard, and was very much devoted to government fiat money.

  30. John that wasn't fair what you said about Friedman opposing the gold standard he was for the currency tide to a commodity just not gold because there isn't enough of it come on be real man

  31. The US dollar is backed by….Nothing!!! It's just generally trusted by the world as the preferred dollar and it's close association to oil.
    There will be another great depression someday, when the dollar collapses, but this time, it will be worse and more damaging than at any point in history.
    To any of you I would say watch Zeitgeist:Addendum. How the dollar came about and it's relationship to the federal reserve and fractional reserve banking. It's one. Big. Ponzi. Scheme…

  32. Bitcoin is the money for free people. It's easy to use, easy to carry, practical. It's got a fixed supply and increases in value. It eliminates fees and expenses that middle-men like banks and a federal reserve impose on others. It's secure. A bank or a government can seize your fiat money or control its value if it doesn't approve of your speech or worldview. Bitcoin cannot be manipulated by banks and governments.

  33. Government pension obligations will destroy the value of the USA dollar. That $9000/month pension check will soon be next to worthless.
    Democrats purchased votes by promising unaffordable pensions.

  34. These days fiat money has less to do with "value" or "trust", and a lot more to do with the only way we know how to "keep score" and the only practical way "to play the game"— especially in this technological age in which nearly all substantial transactions involve "electronic virtual money". Regrettably, fiat makes it way too easy for governments to steal money from citizens simply by increasing the money supply excessively, which causes inflation, which increases revenue from income taxes and sales taxes. Their only restraint is not overdoing it to the point of economic collapse or an outright rebellion.

  35. "…suspended temporarily…", said Tricky Dicky. But therein lies the answer. If US wants a return to gold standard then remove the temporary suspension: Executive Order 11615 (I believe.)

  36. I’m building the Greenlandic Homestead that will be luxurious and maybe a few tiny pieces. But I can’t afford to waste investments! Spend with wisdom!

  37. Why doesn’t anyone mention that gold was illegal to own in the US between 1933-1973. 1972 is when Nixon took the USA off the gold standard. So if you’re fine not being able to own gold, then sure, let’s go back to the gold standard. I’m all for it. Why doesn’t Mr. Stossel mention that as well? Isn’t he suppose to be objective?

  38. I wonder what has happened to all the gold that the various governments got rid of?
    If some people are stockpiling it, then the switch back to gold won't be stable enough.

  39. The value of money comes from the very same supply and demand principle. It is not relevant what it is tied to. You can have a ton of gold worth of money, but when food is a scarcity I would not trade my slice of bread for it if my survival depends on it. In this imagined situation the demand for the bread was way higher than for the gold.

    The core reason for why the value of USD has dropped since has more to do with the way US trades. After the war, the US had no real competition for their products as they were the only country in the world with intact industrial zones and population. Being successful at times of no real competition is not something to base your comparison on. Since then there is competition and the US is able to export less and less products for which there is demand in other countries. As the demand for US products decline the demand for USD declines as well hence its value lowers. Keep creating and try preserving the secrets of technological advancements. The longer you can keep your lead in these newer high in demand products the more valuable your currency stays. Or find and own more resources.

  40. What about the Federal Reserve? It's actually based out of the UK and is a private company that issues money at a FEE for use.

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