Free Markets, Free People
Money? Or Receipts?
Recently, while listening to the Opie and Anthony show, I heard an interview with Loius CK, the comedian. And he said something that struck me as quite profound. And quite true.
Back in olden times–i.e., prior to the 1930s–our paper money wasn’t actually money, as such. Instead, it was a receipt for the real money–gold, or silver–that we had stored in the bank. And the amount of gold we had determined how many of those receipts we could get. The gold or silver we held had an intrinsic value, and the paper currency we carried was simply a representation of that intrinsic value.
Then, in the 1930s, we simply got rid of the metal, and kept the receipts. Ever since then, the paper money we carry around with us has no intrinsic value. And the value of that receipt is worth whatever the government says it’s worth. It is a medium of exchange, and nothing more.
You may have $1,000,000 in the bank. And if the government says that it’s only worth a cup of coffee in exchange, then that’s exactly what it’s worth. It doesn’t matter if acquiring that million bucks was the work of a lifetime. The government can, if it wishes or is unwise, reduce the stored value of your life’s work to a trip to Starbucks.
Just something to think about.