1 00:00:00,280 --> 00:00:11,879 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:19,880 --> 00:00:23,599 Speaker 2: Money it's a driving factor in our lives. But how 3 00:00:23,680 --> 00:00:26,439 Speaker 2: often have you thought about those little green pieces of 4 00:00:26,520 --> 00:00:30,520 Speaker 2: paper in your wallet and the idea that created it, 5 00:00:31,000 --> 00:00:33,479 Speaker 2: or the digital zeros and ones in our banks and 6 00:00:33,600 --> 00:00:38,559 Speaker 2: brokerage accounts that represent your money. Is it real or 7 00:00:38,680 --> 00:00:43,600 Speaker 2: is money simply a collective delusion. I'm Barry Ridoltson on 8 00:00:43,640 --> 00:00:46,560 Speaker 2: today's edition of At the Money. We're going to chat 9 00:00:46,600 --> 00:00:51,440 Speaker 2: about the concept of what exactly money is. To help 10 00:00:51,520 --> 00:00:53,560 Speaker 2: us unpack all of this and what it means to you. 11 00:00:53,960 --> 00:00:56,520 Speaker 2: Let's bring in Paul Vinya of The Wall Street Journal. 12 00:00:56,840 --> 00:01:01,080 Speaker 2: He's published numerous books on money, crypto. His latest book, 13 00:01:01,440 --> 00:01:06,479 Speaker 2: The Almightier How Money became God, greed became virtue, and 14 00:01:06,680 --> 00:01:11,759 Speaker 2: debt became Sin. It's out July twenty twenty five. So Paul, 15 00:01:12,080 --> 00:01:16,160 Speaker 2: let's start with the basics. You define money as a 16 00:01:16,160 --> 00:01:19,960 Speaker 2: belief system. Explain what that means, sure. 17 00:01:20,319 --> 00:01:22,160 Speaker 3: Briefly, So, I mean this is Look, this is something 18 00:01:22,160 --> 00:01:25,399 Speaker 3: that I never thought about for the majority of my life. 19 00:01:26,120 --> 00:01:28,279 Speaker 3: To me, money was just what was in my wallet, 20 00:01:28,319 --> 00:01:29,880 Speaker 3: what was in my bank account. I could use it, 21 00:01:29,920 --> 00:01:32,280 Speaker 3: I could buy things I didn't worry about what it was. 22 00:01:33,080 --> 00:01:37,040 Speaker 3: It wasn't important to me. That changed over the last 23 00:01:37,080 --> 00:01:39,080 Speaker 3: ten years or so and I started thinking to my 24 00:01:39,200 --> 00:01:42,040 Speaker 3: you know, sort of thinking about this question what is money? 25 00:01:42,720 --> 00:01:45,800 Speaker 3: And that sent me down this rabbit hole and where 26 00:01:45,840 --> 00:01:48,280 Speaker 3: I have, where I've come out on that is that 27 00:01:48,600 --> 00:01:52,000 Speaker 3: money is not a real thing. You hold money in 28 00:01:52,040 --> 00:01:54,240 Speaker 3: your hand, you hold paper dollars, your whole coins, and 29 00:01:54,280 --> 00:01:57,320 Speaker 3: you think it's real. You think that's money. That isn't money. 30 00:01:57,360 --> 00:02:02,520 Speaker 3: That's a thing that represents money, dollar, bills, coins, money 31 00:02:02,600 --> 00:02:06,680 Speaker 3: itself is It's a system. It's a system we made up. 32 00:02:06,720 --> 00:02:09,880 Speaker 3: It's a system human beings invented as a way to 33 00:02:10,000 --> 00:02:13,000 Speaker 3: help us keep track of resources of all our stuff. 34 00:02:13,400 --> 00:02:15,360 Speaker 3: You look at the point of a society, and really 35 00:02:15,360 --> 00:02:17,680 Speaker 3: the point of a large scale society is to get 36 00:02:17,680 --> 00:02:20,600 Speaker 3: a group of people together to combine their efforts and 37 00:02:20,639 --> 00:02:24,239 Speaker 3: their resources to take care of each other. The way 38 00:02:24,280 --> 00:02:27,200 Speaker 3: as societies got much larger and larger, they found an 39 00:02:27,200 --> 00:02:30,480 Speaker 3: efficient way to do that, and it was basically to 40 00:02:30,480 --> 00:02:33,760 Speaker 3: have everything represented by money. And then if you have money, 41 00:02:33,800 --> 00:02:37,040 Speaker 3: you have a claim on the group's resources. And what 42 00:02:37,080 --> 00:02:38,880 Speaker 3: has happened over the last five thousand years or so 43 00:02:39,000 --> 00:02:43,240 Speaker 3: is that we have mythologized money into this real thing, 44 00:02:43,320 --> 00:02:46,560 Speaker 3: and we have convinced ourselves, we have hypnotized ourselves into 45 00:02:46,639 --> 00:02:49,239 Speaker 3: believing that it is a real thing, to the point 46 00:02:49,240 --> 00:02:53,359 Speaker 3: where the pursuit of it on its own has taken 47 00:02:53,440 --> 00:02:55,600 Speaker 3: over most of what we think of as the point 48 00:02:55,600 --> 00:02:59,480 Speaker 3: of economics in society. But it's not a real thing, 49 00:02:59,600 --> 00:03:01,880 Speaker 3: is not a thing that exists on its own. It 50 00:03:01,919 --> 00:03:04,080 Speaker 3: is a thing that we created. It's a system that 51 00:03:04,120 --> 00:03:08,040 Speaker 3: we created, and it has become for us a belief system. 52 00:03:08,200 --> 00:03:10,640 Speaker 2: So I want to stay with that because it's fascinating. 53 00:03:10,720 --> 00:03:14,040 Speaker 2: In the book, you write, money isn't real, It has 54 00:03:14,160 --> 00:03:19,799 Speaker 2: no objective existence of its own. Explain how money is 55 00:03:19,919 --> 00:03:27,519 Speaker 2: really just this agreed upon collective system that everybody accepts, 56 00:03:27,840 --> 00:03:33,160 Speaker 2: even though it's an abstract concept that is created by people. 57 00:03:33,840 --> 00:03:37,440 Speaker 3: And the whole point of the book is that not 58 00:03:37,520 --> 00:03:39,480 Speaker 3: the whole point, but a main point of the book 59 00:03:39,760 --> 00:03:42,440 Speaker 3: is that money is a product of religion. So I'll 60 00:03:42,480 --> 00:03:43,920 Speaker 3: explain it say that again. 61 00:03:44,080 --> 00:03:46,120 Speaker 2: Money is a product of religion. 62 00:03:46,760 --> 00:03:51,280 Speaker 3: Money is a product of religion, and I'll explain it 63 00:03:51,280 --> 00:03:53,360 Speaker 3: in terms of that, because that's how this all becomes 64 00:03:53,440 --> 00:03:56,960 Speaker 3: very Germane. When money first appears in the historical record. 65 00:03:57,440 --> 00:04:02,520 Speaker 3: It is in these ancient messages Potamian temples. Temple officials 66 00:04:02,920 --> 00:04:07,839 Speaker 3: developed money, bab They developed money and writing actually as 67 00:04:07,960 --> 00:04:11,200 Speaker 3: a way to keep track of the temple's possessions. And 68 00:04:11,280 --> 00:04:16,000 Speaker 3: that is where it starts. And what emerged from that. 69 00:04:16,120 --> 00:04:19,600 Speaker 3: The realization of that actually was that this was an 70 00:04:19,680 --> 00:04:25,480 Speaker 3: incredibly efficient system. Money is actually a really good product. 71 00:04:25,800 --> 00:04:28,760 Speaker 3: If you think of terms of things we've invented over 72 00:04:28,839 --> 00:04:32,320 Speaker 3: our history. We invent fire, but you know how to 73 00:04:32,440 --> 00:04:37,280 Speaker 3: use fire, the wheel, bridges, boats, anything I could sit 74 00:04:37,320 --> 00:04:39,680 Speaker 3: here all day and do it right. Money is one 75 00:04:39,760 --> 00:04:43,359 Speaker 3: of those things we invented. Money was an incredibly efficient 76 00:04:43,480 --> 00:04:46,560 Speaker 3: way to keep track of resources. And what I find 77 00:04:46,600 --> 00:04:50,599 Speaker 3: interesting is that as soon as money emerges, that is 78 00:04:50,640 --> 00:04:52,880 Speaker 3: when you start to see what we really think of 79 00:04:52,960 --> 00:04:58,960 Speaker 3: as modern quote unquote human beings. Society takes off. It 80 00:04:59,080 --> 00:05:03,360 Speaker 3: flourishes because money is a valuable product. It's a useful product. 81 00:05:03,520 --> 00:05:07,360 Speaker 3: The problem has become that money is such a good 82 00:05:07,400 --> 00:05:09,440 Speaker 3: product that we've started to think of it on it 83 00:05:09,480 --> 00:05:12,320 Speaker 3: as this thing on its own, with its own values 84 00:05:12,760 --> 00:05:16,640 Speaker 3: and its own existence. And a lot of that is 85 00:05:17,320 --> 00:05:20,719 Speaker 3: tied up in our beliefs in religion, because, as I said, 86 00:05:21,240 --> 00:05:24,440 Speaker 3: more of its history was it directly a product of 87 00:05:24,480 --> 00:05:27,480 Speaker 3: religion than it was an independent thing that existed on 88 00:05:27,520 --> 00:05:32,160 Speaker 3: its own. So our beliefs in religion and gods and 89 00:05:32,839 --> 00:05:35,560 Speaker 3: supernatural beings that control what we do and how we 90 00:05:35,720 --> 00:05:39,560 Speaker 3: live is tied up very very closely with how we 91 00:05:39,720 --> 00:05:41,080 Speaker 3: feel about money. 92 00:05:41,480 --> 00:05:45,480 Speaker 2: Let me stay with the concept of Mesopotamia. You write 93 00:05:45,480 --> 00:05:50,160 Speaker 2: about a city, and in the so there's fifty thousand 94 00:05:50,160 --> 00:05:54,360 Speaker 2: plus people living within the confines of this walled city, 95 00:05:54,400 --> 00:05:57,679 Speaker 2: with tens of thousands more working in the field, working 96 00:05:57,680 --> 00:06:01,600 Speaker 2: in the farms and suburbs. But what's fascinating about the 97 00:06:01,640 --> 00:06:06,320 Speaker 2: description of the city is the single biggest building in 98 00:06:06,360 --> 00:06:09,680 Speaker 2: the city and perhaps in the world, is the temple, 99 00:06:09,720 --> 00:06:13,480 Speaker 2: which can be seen for miles and miles around, even 100 00:06:13,520 --> 00:06:17,440 Speaker 2: from outside of the walls of the city. And the 101 00:06:17,560 --> 00:06:22,039 Speaker 2: first writing is keeping track of here's how much barley 102 00:06:22,120 --> 00:06:25,720 Speaker 2: has come into the temple, Here's how much people owe 103 00:06:25,760 --> 00:06:30,440 Speaker 2: on this. Here's how we create a system of assets 104 00:06:30,440 --> 00:06:35,720 Speaker 2: and liabilities, of credit and debt. It all stems from 105 00:06:35,880 --> 00:06:40,520 Speaker 2: the fact that the entire city was driven by religion. 106 00:06:41,400 --> 00:06:45,440 Speaker 2: Plus people had to work to survive, and the powers 107 00:06:45,480 --> 00:06:48,360 Speaker 2: that be had to come up with a methodology of 108 00:06:48,520 --> 00:06:52,720 Speaker 2: keeping track of all this. Is that the genesis of 109 00:06:52,839 --> 00:06:57,280 Speaker 2: the close relationship between money and religion or is it 110 00:06:57,360 --> 00:06:57,960 Speaker 2: something else? 111 00:06:58,800 --> 00:07:01,920 Speaker 3: No, it's that exact. And what I tried to do 112 00:07:02,320 --> 00:07:05,560 Speaker 3: in talking about Europe was compare it to a modern city, 113 00:07:05,760 --> 00:07:09,120 Speaker 3: New York City. That's what Europe was like back five 114 00:07:09,120 --> 00:07:13,720 Speaker 3: thousand years ago. Is this great messa, cosmopolitan, metropolitan city. 115 00:07:13,960 --> 00:07:16,680 Speaker 3: And you're right, the temple was the largest. This whole 116 00:07:16,680 --> 00:07:21,320 Speaker 3: city literally revolved around the temple. And I think what's 117 00:07:21,360 --> 00:07:24,240 Speaker 3: important when we talk about modern and ancient cities is 118 00:07:24,320 --> 00:07:26,640 Speaker 3: to realize there were a lot of things that were similar, 119 00:07:27,120 --> 00:07:30,280 Speaker 3: but there was one thing that was massively different, and 120 00:07:30,360 --> 00:07:34,800 Speaker 3: it is that the city revolved around the temple in 121 00:07:34,840 --> 00:07:38,040 Speaker 3: those ancient societies, and I found this very fascinating myself. 122 00:07:38,040 --> 00:07:42,760 Speaker 3: In these ancient societies, the entire point of life actually 123 00:07:43,200 --> 00:07:46,640 Speaker 3: was geared around one goal, and that goal was to 124 00:07:46,800 --> 00:07:51,560 Speaker 3: please the gods. People in these cities believed that the gods, 125 00:07:51,680 --> 00:07:55,720 Speaker 3: multiple gods, were real, They existed, and they controlled everything, 126 00:07:55,840 --> 00:07:57,800 Speaker 3: and whether you lived or died, or how well you 127 00:07:57,920 --> 00:08:00,200 Speaker 3: lived and then died, and where you went after you died, 128 00:08:00,560 --> 00:08:02,920 Speaker 3: all of that was determined by these gods, and you 129 00:08:03,040 --> 00:08:06,360 Speaker 3: wanted to please the gods. There was no separation of 130 00:08:06,440 --> 00:08:09,760 Speaker 3: church and state. The church was the state, and the 131 00:08:09,800 --> 00:08:13,760 Speaker 3: state's entire existence was built around trying to please these gods. 132 00:08:14,280 --> 00:08:19,360 Speaker 3: And that framework is what money emerges from, and that framework, 133 00:08:19,400 --> 00:08:23,320 Speaker 3: I think is incredibly important to our understanding of how 134 00:08:23,360 --> 00:08:27,760 Speaker 3: we feel about money today. Wealth was seen as a 135 00:08:27,840 --> 00:08:30,840 Speaker 3: sign of the God's favor. If the God liked the city, 136 00:08:31,000 --> 00:08:33,480 Speaker 3: if the God liked the ruler, if the God liked 137 00:08:33,559 --> 00:08:37,960 Speaker 3: the people, they flourished, they had wealth. Money was a 138 00:08:38,040 --> 00:08:42,160 Speaker 3: representation of that. So money was a representation of the 139 00:08:42,200 --> 00:08:45,480 Speaker 3: God's favor, and you wanted more of it. Of course, 140 00:08:46,120 --> 00:08:49,360 Speaker 3: I really think that colors a lot about what we 141 00:08:49,559 --> 00:08:51,960 Speaker 3: think about money today and how we feel about it. 142 00:08:52,320 --> 00:08:54,640 Speaker 3: But it's something that has just been kind of buried 143 00:08:54,640 --> 00:08:57,760 Speaker 3: in our collective subconscious and we just don't see it. 144 00:08:58,120 --> 00:09:01,680 Speaker 2: So let's talk about confidence and faith, which you emphasized 145 00:09:01,720 --> 00:09:07,199 Speaker 2: throughout the book. What role did trust play in institutions, 146 00:09:07,240 --> 00:09:12,360 Speaker 2: be they government or banks, or even various religions in 147 00:09:12,559 --> 00:09:16,240 Speaker 2: shaping the public's belief about money over time. 148 00:09:16,760 --> 00:09:21,840 Speaker 3: Trust is a huge part of how we value money, 149 00:09:21,960 --> 00:09:23,600 Speaker 3: and I'll give you the good. A good example of 150 00:09:23,600 --> 00:09:26,680 Speaker 3: this is what I opened the book with nineteen thirty three, 151 00:09:26,920 --> 00:09:30,040 Speaker 3: The Great Depression. The United States is in just the 152 00:09:30,080 --> 00:09:34,400 Speaker 3: worst economic shape it's ever been in. The system has 153 00:09:34,600 --> 00:09:39,200 Speaker 3: largely failed, the banking system has collapsed, the government is 154 00:09:39,360 --> 00:09:42,960 Speaker 3: barely operating. And the government back then was not nearly 155 00:09:43,000 --> 00:09:44,680 Speaker 3: as large as it is now. It didn't have as 156 00:09:44,760 --> 00:09:48,280 Speaker 3: much of a direct impact in people's lives, and I 157 00:09:48,320 --> 00:09:51,200 Speaker 3: think in large parts of the country the government just 158 00:09:51,280 --> 00:09:53,800 Speaker 3: wasn't there, and I think there were real fears that 159 00:09:53,840 --> 00:09:57,640 Speaker 3: the entire American experiment was going to collapse over what 160 00:09:57,720 --> 00:10:00,199 Speaker 3: had happened in nineteen twenty nine. In the years after 161 00:10:00,360 --> 00:10:03,560 Speaker 3: so FDR comes in, he gets elected, he starts doing 162 00:10:03,679 --> 00:10:07,400 Speaker 3: It's a pretty fascinating thing at the time. He utilizes 163 00:10:07,480 --> 00:10:11,320 Speaker 3: a modern technology called radio. He does these fireside chats. 164 00:10:11,320 --> 00:10:15,000 Speaker 3: He just talks into the radio and he explains things 165 00:10:15,000 --> 00:10:18,480 Speaker 3: to people, and they were tremendously successful. They really worked. 166 00:10:18,880 --> 00:10:23,600 Speaker 3: What's the first fireside chat about money and banking? FDR? 167 00:10:23,840 --> 00:10:27,160 Speaker 3: The president gets on the radio and just explains to 168 00:10:27,320 --> 00:10:31,040 Speaker 3: people how the banking system works, how money works, what 169 00:10:31,080 --> 00:10:33,440 Speaker 3: they plan to do, how it's going to work, and 170 00:10:33,480 --> 00:10:35,720 Speaker 3: what he says to them is he says, you have 171 00:10:35,960 --> 00:10:40,000 Speaker 3: to have faith, you have to have belief in the banks, 172 00:10:40,280 --> 00:10:43,640 Speaker 3: in the money, and all these things, and collectively, if 173 00:10:43,720 --> 00:10:47,800 Speaker 3: we all have faith, we will succeed. It's amazing to 174 00:10:47,920 --> 00:10:52,200 Speaker 3: think that faith and trust were the things he was 175 00:10:52,240 --> 00:10:56,120 Speaker 3: really talking about. But if you turn it around and look, 176 00:10:56,520 --> 00:10:59,439 Speaker 3: every single time you have one of these incidents where 177 00:10:59,440 --> 00:11:01,880 Speaker 3: a currency fails and a government fails, and you have 178 00:11:02,000 --> 00:11:06,360 Speaker 3: hyperinflation and everything falls apart to come a denominator and 179 00:11:06,400 --> 00:11:10,760 Speaker 3: all those examples, people lose faith in the money, which, 180 00:11:10,800 --> 00:11:12,400 Speaker 3: if you think about what I was just saying, is 181 00:11:12,480 --> 00:11:16,280 Speaker 3: kind of weird. Why should faith in money matter at all? 182 00:11:16,320 --> 00:11:18,679 Speaker 3: If money was real, if money had its own existence, 183 00:11:19,120 --> 00:11:23,200 Speaker 3: if the intrinsic value of a dollar bill was something 184 00:11:23,200 --> 00:11:29,359 Speaker 3: that was tangible. For instance, a tree has intrinsic value, Copper, oil, commodity, 185 00:11:29,400 --> 00:11:34,120 Speaker 3: all these things have intrinsic values, intrinsic uses. They are real. 186 00:11:34,440 --> 00:11:37,520 Speaker 3: Your faith in them does not matter one bit whether 187 00:11:37,600 --> 00:11:40,079 Speaker 3: or not you believe in copper. Copper is still there 188 00:11:40,240 --> 00:11:42,320 Speaker 3: and everything you can use it for is still there. 189 00:11:42,920 --> 00:11:45,480 Speaker 3: Money is different. If you don't have faith in money, 190 00:11:45,880 --> 00:11:48,720 Speaker 3: and this one I'm telling you, look about Zimbabwe, Why 191 00:11:48,760 --> 00:11:52,600 Speaker 3: am Our, Germany, Argentina, all these examples. If you don't 192 00:11:52,640 --> 00:11:56,880 Speaker 3: have faith in money, money is useless. Why why should 193 00:11:56,880 --> 00:11:59,960 Speaker 3: faith matter? And the reason is because money isn't real 194 00:12:00,040 --> 00:12:02,280 Speaker 3: on money is just the system we agreed upon. As 195 00:12:02,280 --> 00:12:05,040 Speaker 3: long as people agree to use the system, the system works. 196 00:12:05,280 --> 00:12:07,760 Speaker 3: As soon as people stop believing in the value of 197 00:12:07,800 --> 00:12:13,080 Speaker 3: the system, they distrust it, it collapses. That is the core, 198 00:12:13,800 --> 00:12:15,920 Speaker 3: core part of everything I'm talking about. 199 00:12:16,080 --> 00:12:18,200 Speaker 2: So you mentioned in the book that one of the 200 00:12:18,240 --> 00:12:22,600 Speaker 2: first fireside chats that FDR did over the radio was 201 00:12:22,640 --> 00:12:26,800 Speaker 2: to discuss the quote loss of confidence in the soundness 202 00:12:27,200 --> 00:12:32,800 Speaker 2: of banks and his plan to restore faith. To restore confidence, 203 00:12:33,320 --> 00:12:36,560 Speaker 2: including things like the creation of the Securities and Exchange 204 00:12:36,559 --> 00:12:40,000 Speaker 2: Commission so we don't have problems on Wall Street and 205 00:12:40,040 --> 00:12:43,559 Speaker 2: the Federal Deposit Insurance Corporation so we don't have these 206 00:12:43,640 --> 00:12:47,040 Speaker 2: various runs on banks, and on and on the list goes. 207 00:12:47,800 --> 00:12:50,680 Speaker 2: All of this sounds like it was just an attempt 208 00:12:51,040 --> 00:12:55,440 Speaker 2: to shore up the belief system, the faith in the 209 00:12:55,480 --> 00:12:58,599 Speaker 2: banking system. Is that what you're saying, Oh, yeah, absolutely, 210 00:12:58,679 --> 00:12:59,800 Speaker 2: I mean that's what it was. 211 00:13:01,559 --> 00:13:05,000 Speaker 3: I'm not accusing FDR of being underhanded, but in a way. 212 00:13:05,679 --> 00:13:08,560 Speaker 3: He was being a little underhanded. He was trying to 213 00:13:08,600 --> 00:13:12,600 Speaker 3: hypnotize people into believing in money again in US dollars 214 00:13:12,640 --> 00:13:15,000 Speaker 3: and using them, and he had to go on the 215 00:13:15,120 --> 00:13:16,680 Speaker 3: radio and he had to talk to them, and he 216 00:13:16,720 --> 00:13:20,640 Speaker 3: was an incredibly persuasive speaker. So he used that as 217 00:13:20,679 --> 00:13:23,480 Speaker 3: a tool. All the things you're talking about, though, the 218 00:13:23,559 --> 00:13:27,920 Speaker 3: regulatory structures he put in, those were tools to convince 219 00:13:28,040 --> 00:13:31,920 Speaker 3: people that these assets that they had previously believed in 220 00:13:32,040 --> 00:13:35,880 Speaker 3: and did not anymore believe in, still had some kind 221 00:13:35,920 --> 00:13:40,680 Speaker 3: of fundamental value that could be useful to society. 222 00:13:40,920 --> 00:13:43,920 Speaker 2: Huh. So one of the things FDR did was take 223 00:13:44,000 --> 00:13:47,559 Speaker 2: us off the gold standard, and gold had long been 224 00:13:47,600 --> 00:13:51,440 Speaker 2: thought of as, if not money, well certainly money. Like 225 00:13:51,920 --> 00:13:55,720 Speaker 2: how did the removal of the United States Treasury Department 226 00:13:55,760 --> 00:14:00,000 Speaker 2: in Central Bank from a gold standard impact our concept 227 00:14:00,160 --> 00:14:00,480 Speaker 2: of money? 228 00:14:01,000 --> 00:14:03,280 Speaker 3: Gold had been used and for you know, everyone knows 229 00:14:03,320 --> 00:14:06,360 Speaker 3: gold has been used throughout history as money, but gold 230 00:14:06,440 --> 00:14:11,640 Speaker 3: isn't actually money. Gold is a representation of money. Anything 231 00:14:11,679 --> 00:14:15,920 Speaker 3: can be a representation of money, gold, dollar bills, coins, 232 00:14:16,200 --> 00:14:20,240 Speaker 3: cawerie sheells, digits, bitcoin, you know, I mean you can 233 00:14:20,280 --> 00:14:24,080 Speaker 3: have a digital ledger that represents money. All of those 234 00:14:24,120 --> 00:14:27,720 Speaker 3: things can be used as money. None of them are money. 235 00:14:27,800 --> 00:14:31,240 Speaker 3: Money is the system. So in the thirties you have 236 00:14:31,280 --> 00:14:35,640 Speaker 3: the gold standard, the economy starts collapsing, people start hoarding gold. 237 00:14:35,960 --> 00:14:39,000 Speaker 3: There's no longer enough circulating currency for the government and 238 00:14:39,040 --> 00:14:41,680 Speaker 3: for FDR to do anything that he wants to do. 239 00:14:42,200 --> 00:14:45,960 Speaker 3: So he has to convince people to have faith in 240 00:14:46,040 --> 00:14:48,920 Speaker 3: the system. And what he does is, you can see this, 241 00:14:49,040 --> 00:14:53,800 Speaker 3: he maneuvers people over to believing in the system, and 242 00:14:53,840 --> 00:14:57,920 Speaker 3: he maneuvers them away from the faith in gold. That 243 00:14:58,120 --> 00:15:01,280 Speaker 3: isn't what matters. What matters is the soundness of the banks. 244 00:15:01,320 --> 00:15:04,280 Speaker 3: What matters is the soundness of the government. Believe in 245 00:15:04,320 --> 00:15:07,240 Speaker 3: those things, have confidence, have faith in all those things. 246 00:15:07,400 --> 00:15:08,920 Speaker 3: And when he did that, once he did that, he 247 00:15:09,000 --> 00:15:11,760 Speaker 3: got people kind of believing again. Then he went and 248 00:15:11,800 --> 00:15:13,040 Speaker 3: got rid of the gold standard. 249 00:15:13,240 --> 00:15:15,920 Speaker 2: So is money a store of value or is it 250 00:15:15,960 --> 00:15:17,600 Speaker 2: a medium of exchange? 251 00:15:18,200 --> 00:15:21,160 Speaker 3: Money is both of those things. Money is a store 252 00:15:21,200 --> 00:15:23,280 Speaker 3: of value, It is a medium of exchange. Is a 253 00:15:23,360 --> 00:15:27,400 Speaker 3: unit of account. Anything can really be a store of value. 254 00:15:28,360 --> 00:15:30,560 Speaker 3: Most of what you know the market's trade in are 255 00:15:30,600 --> 00:15:35,360 Speaker 3: stores of value. Anything can really be a unit of account. 256 00:15:35,440 --> 00:15:38,480 Speaker 3: It just so happens that it's dollars. But any currency 257 00:15:38,520 --> 00:15:40,600 Speaker 3: will work just as well as long as the people 258 00:15:40,640 --> 00:15:43,080 Speaker 3: who are using it all agree upon it, and all 259 00:15:43,120 --> 00:15:45,280 Speaker 3: of them can work as a means of exchange. Anything 260 00:15:45,320 --> 00:15:47,720 Speaker 3: can work as a means of exchange. Barter can work 261 00:15:47,720 --> 00:15:51,480 Speaker 3: as a means of exchange. Those are just functions. Those 262 00:15:51,560 --> 00:15:55,760 Speaker 3: are not the thing itself. The thing itself is nothing 263 00:15:56,040 --> 00:16:00,000 Speaker 3: more than a shared collective belief in this cety. 264 00:16:00,640 --> 00:16:04,760 Speaker 2: So to wrap up, I guess money is a collective delusion. 265 00:16:04,840 --> 00:16:09,360 Speaker 2: It's an abstract thing that would not exist without human beings, 266 00:16:09,480 --> 00:16:13,160 Speaker 2: unlike trees or copper or gold for that matter, but 267 00:16:13,400 --> 00:16:16,720 Speaker 2: it is part of a collective system of belief. It 268 00:16:16,800 --> 00:16:21,360 Speaker 2: relies on confidence, It relies on faith. If the system 269 00:16:22,000 --> 00:16:25,360 Speaker 2: is doubted, it begins to creak, and it begins to crack, 270 00:16:25,440 --> 00:16:28,920 Speaker 2: and we end up with circumstances like the Weimar Republic 271 00:16:29,000 --> 00:16:32,720 Speaker 2: or Zimbabwe. Which is why it's so important for a 272 00:16:32,840 --> 00:16:38,640 Speaker 2: society to maintain a belief that their systems and this 273 00:16:38,720 --> 00:16:43,920 Speaker 2: includes banks, debt, and credit are sounds and will continue 274 00:16:43,960 --> 00:16:48,280 Speaker 2: to work. I'm barry Redults. This is Bloomberg's at the 275 00:16:48,360 --> 00:16:49,280 Speaker 2: Money